Cisco's consumer electronics dream
The networking giant sees a big opportunity in sales to consumers, and it may surprise some to know the company has actually been in the biz for nearly six years.
Correction: An earlier version of this story misstated Cisco's yearly earnings.
If you haven't noticed, Cisco Systems, whose products have been used to build the Internet for 20 years, has spent the past 6 years becoming a big player in the consumer electronics market.
While Cisco still generates the bulk of its nearly $40 billion in yearly revenue from selling routers and switches to large companies and Internet service providers, the company has also been pushing into new markets, such as consumer electronics, over the past several years.
Still, most consumers probably have no idea who Cisco is or what it does. Sure, they may have seen those cute "human network" commercials on TV. But other than that, I'd guess the average Joe has no clue what Cisco does.
Some might be familiar with the Linksys brand, which has traditionally sold home networking gear. But Cisco executives say they are on a mission to make Cisco a household name. Not only is the company making a bigger effort to brand its products as Cisco, but it's also busy developing a slew of new products for the consumer market.
And on Thursday the company announced its most aggressive play in the consumer market to date with the $590 million acquisition of Pure Digital Technologies, the maker of the popular Flip Video mini camcorders.
But Pure is by no means the only major acquisition Cisco has made in the consumer market. In fact, the company so far has pretty much built this part of its business through acquisitions. In 2003, it got its start in the competitive CE market with the $500 million acquisition of the home-networking equipment maker Linksys. Then in 2005, it bought Scientific Atlanta, a quasi-consumer electronics company, for $7 billion. Scientific Atlanta makes set-top boxes that Cisco sells to subscription TV providers.
Since then the company has made a few, smaller consumer electronics purchases. In 2005, it spent $61 million in cash for a small Danish company called Kiss Technologies. Cisco never ended up selling Kiss' online video-on-demand boxes, but it has integrated the technology into some of its new products. In fact, Ned Hooper, senior vice president of Cisco's Corporate Development and Consumer Groups, said in an interview that some of Kiss' technology made its way into Cisco's new Media Hub, which was announced in January at the Consumer Electronics Show. And some other bits of the technology have also been integrated into Scientific Atlanta's products.
To give readers a sense of just how far along Cisco is in its efforts to win over consumers, I've highlighted some of Cisco's most important products in the consumer market. From its flagship Linksys router to the newly announced Home Audio and Media Hub products to the newly acquired Flip Video cameras, Cisco is building up an arsenal of consumer devices that not only connect devices together via a home network, but also help users produce and share digital media throughout the home and throughout the Web.
Linksys WRT610N Simultaneous Dual-N Band Wireless Router - $150 to $200
Linksys WRT610N Wireless Router CNET review
What is it? The Linksys WRT610N is Cisco's flagship Wi-Fi router. It offers both 2.4GHz and 5GHz transmission at the same time, which means it can support multiple wireless devices with up to 600Mbps of available bandwidth. The 5GHz radio band frequency is wider and less crowded than the 2.4GHz radio frequency, which is used by most wireless devices, including cordless phones, baby monitors, and Bluetooth. Cisco offers a wide range of wireless routers, including two new wireless routers that are coming out soon.
What makes it cool? The WRT610N is a compact device with an internal antenna that supports both 2.4Ghz and 5Ghz 802.11n simultaneously for more capacity and potentially fewer interference issues. It can also act as a network-attached storage device when coupled with an external hard drive, which allows users to easily share files and move them between the storage device and other network connected devices.
What makes it not so cool? Cisco offers a short one-year warranty for the device. And the CNET editor who reviewed it said the product's performance when using the 2.4GHz band could be better. And at $150 to $200, it's expensive.
Linksys Media Hub Home Entertainment Storage NMH305 (NAS server) - $300
Linksys Media Hub without LCD NMH305 CNET preview
What is it? The Linksys Media Hub is a storage hub that allows people to access and stream media. Cisco offers the device in two main configurations.
What makes it cool? Users can enjoy multiple streams of media from the hub at any time. This means that you can watch a movie while your kids listen to music and your spouse browses photos. The system also has "intelligent aggregation," which automatically finds, copies, and organizes media from all the UPnP devices on your network--even collecting songs from the same CD stored in different places into one virtual album. Photos can also be imported directly from compact Flash devices, SD cards, and memory sticks with a built-in Media Reader. The NMH305 is the budget version of the device and offers 500 gigabytes of storage.
What makes it not so cool? The cheapest version of the product still requires a computer to manage the device.
Linksys Media Hub Home Entertainment Storage with LCD NMH410 (NAS server) - $430
Linksys Media Hub with LCD NMH410 CNET preview
What is it? The NMH400 is a Media Hub storage device that offers all the functionality found in the low-end product. The NMH410 product comes with 1 terabyte of storage.
What makes it cool? It offers a lot of storage. And it also has an LCD screen that lets users view a variety of information and perform certain tasks without a PC, such as updating firmware or making instant backups.
What makes it not so cool? It's expensive at over $400.
Wireless Home Audio - Premier kit $1,000, Trio $850, Executive $550
Wireless Home Audio CNET preview
What is it? The Wireless Home Audio offering is a suite of six products that allows users to share music in multiple rooms throughout their homes. The products are available separately or in three preconfigured bundles.
What makes it cool? It's completely wireless and works with standard Wi-Fi 802.11n gear. It also has touch-sensitive controls. And it offers an iPod dock that allows access to the iPod (and its DRM-protected iTunes library) from any of the base stations on the network.
What makes it not so cool? It's expensive. The bundled packages range in price from $550 to $1,000.
The music system is also limited in its streaming music options compared to other music systems. For example, the Linksys system will initially offer streaming music from some free online radio stations and the Rhapsody subscription service. Its competitor, the Sonos Multi-Room Music System, lets users access the free Pandora and Last.fm music services, as well as Sirius and Napster subscription services; that's in addition to the Rhapsody and free Internet radio stations also found on the Linksys. But Cisco representatives hinted that more audio services will be coming to its system as soon as they can ink the necessary deals.
Another potential hurdle is that consumers may be overwhelmed by the number of pieces in the solution. Here's a rundown of the six elements available in the product line:
- The Conductor (DMC350 Wireless-N Digital Music Center): The flagship component is a self-contained module with a built-in touch-screen control, stereo speakers, and even an integrated CD player. It also includes a small IR remote.
- The Director (DMC250 Wireless-N Music Player with Integrated Amplifier): With its built-in 50-watt-per-channel amplifier, the Director can drive speakers attached directly to it (or you can opt to connect it to an external component via its line-out). This component also includes a screen and small remote.
- The Player (DMP100 Wireless-N Music Extender): Attach this entry-level module to any stereo, boom box, or audiovisual receiver to access the system's digital audio stream.
- Stereo Speaker Kit (DSPK50): This speaker package matches the look and feel of the Director.
- Controller (DMWR1000 Wireless-N Touchscreen Remote): The touch-screen remote is the heart of the Linksys system, able to control any and all of the base stations wirelessly.
- Docking Station for iPod (MCCI40): Attach the MCCI40 to one of the base stations (Conductor, Director, or Player) to enable access to your entire iPod's audio collection throughout the Linksys Wireless Home Audio System.
These products will initially be available in three preconfigured bundles: the Premier Kit for two rooms (Director, Player, Controller, and two IR remotes); the Trio Kit for two rooms (two Players, one Controller, two IR remotes); and the Executive Kit for single rooms (Director, DSPK50 Speaker Kit, IR remote). Users can mix and match individual components and bundles according to their needs.
Linksys Media Center Extender DMA2200 (DVD player/digital multimedia receiver) - $150 to $350
Linksys Media Center Extender DMA2200 with DVD player
What is it?Media Extenders are devices that connect computers running a Microsoft Windows Media Center PC to a TV via an IP network. This allows consumers to access their Media Center files, such as photos, videos, and music on their TVs. They can also use the DVR function and watch recorded TV from their Media Center PC on their TVs. The advantage of using these devices is that the computer, which hosts the Media Center software, can physically be in another room instead of connected directly to the TV.
What makes it cool? The Linksys Media Center extender has a built-in DVD player. It also offers wireless connectivity via 802.11n Wi-Fi for streaming HD videos. And it's a bargain compared to rival Windows Media Center Extenders.
What makes it not so cool? CNET reviewers said, on the whole, the Linkys Media Extender offered inconsistent performance. Specifically, it offered an unreliable streaming bit rate, a laggy interface, frustrating remote control, and had incompatibility issues with various movie file formats. And it only streams from Windows Media Center-compatible PCs.
Linksys WVC54GCA Wireless-G Internet Home Monitoring Camera - $120
Linksys WVC54GCA Wireless-G Internet Home Monitoring Camera CNET Australia review
What is it? A Wi-Fi enabled camera for monitoring your home via the Internet while you're away.
What makes it cool? For a wireless camera for home security, the price is right at only about $120. The camera has a Wi-Fi radio and works wirelessly. CNET Australia reviewers also said the product detects motion quite well.
What makes it not so cool? The automatic device setup was not so automatic, according to the CNET Australia reviewer. The device is not cross-browser compatible, which was a problem.The image quality is only so-so. Reviewers also noted that the blue light that's used when the camera is on may alert burglars that they are being filmed. And savvy thieves may actually unplug the device and steal it along with everything else in the home.
Newly acquired Flip Video camcorders from Pure Digital Technologies
Flip Video MinoHD (black) - $209 to $220
What is it? The Flip Video MinoHD is a mini-handheld digital video recorder that records up to 1 hour of video in high definition.
What makes it cool? It offers true 720p or high-definition video. The device itself is ultraslim. It's easy to use with software that is compatible with both Windows and Mac computers. It offers one-touch video uploading to YouTube, AOL, and MySpace. It comes with an integrated lithium ion rechargeable battery.
What makes it not so cool? The device is somewhat pricey at more than $200. The rechargeable battery isn't removable or replaceable and it only allows for about 2 hours of video time. There are no expansion slots for additional memory. The picture doesn't scale well when viewed on a regular TV, so to keep the image sharp, the reviewers suggest keeping the viewing box small.
Flip Video Mino (black) - $160 to $180
What is it? The Flip Video Mino is a mini-handheld digital video recorder that records up to 1 hour of video in standard definition. And it offers straight the Web video sharing.
What makes it cool? CNET reviewers call this device the best mini camcorder for straight-to-Web video currently available. The Flip Video Mino is an ultraslim design that is also very functional and easy to use. It also offers relatively high-quality sound and video for its class of product and offers one-touch video uploading to YouTube and AOL.
What makes it not so cool? At between $160 and $180, it's a bit pricey for a product in this category. And reviewers point out that it can't match the features of a video-savvy point-and-shoot camera. It also doesn't offer a memory expansion slot. And the rechargeable battery isn't removable or replaceable.
Flip Video Ultra (60 minutes, black) - $120 to $150
What is it? The Flip Video Ultra is a mini-handheld digital video recorder that records up to an hour of standard-definition video.
What makes it cool? The Flip Ultra series offers an upgraded design, video quality, viewing LCD, and software to its lightweight video camera for sharing easy-to-capture, low-resolution video via e-mail and the Web. The new version of software allows for one-touch video uploading to YouTube and AOL Video. The Ultra is also compatible with Macs.
What makes it not so cool? The mini camcorder doesn't offer a memory expansion slot. The video quality is not the same as what you'd get with a MiniDV camcorder. Also the software only allows editing on PCs, not Macs.