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Cisco builds strategy for home market

The company will soon disclose its plans to enter the consumer market, a departure for a networking equipment firm normally associated with the Internet backbone.

    Cisco Systems will soon disclose its plans to enter the consumer market, a major departure for a networking equipment firm normally associated with the highly technical workings of the Internet backbone.

    The push derives from Cisco's oft-stated intention to drive sales of its high-priced routing and switching equipment using a variety of means, much the way chipmaker Intel dips into various niches to spur sales of its latest microprocessors.

    Cisco has been methodically adding the necessary pieces--largely centered around high-speed access to the Net--to make a consumer push over the past year. As part of the strategy, they have also entered into partnerships with companies such as Sony, Microsoft, Intel, and various third-party broadband access providers.

    Yesterday Cisco was linked to General Instrument, a maker of television set-top boxes for cable operators, as a possible investor.

    The company plans to play a high-profile role at one of the largest consumer-oriented trade shows of the year, next month's Consumer Electronics Show in Las Vegas, highlighted by a speech from CEO John Chambers. The executive was also among the speakers at last year's consumer-oriented Comdex computer trade show.

    Executives at the high-flying data networking firm have made no secret of their desire to expand into new markets. Chambers disclosed Cisco's consumer plans to CNET News.com in an interview late last year.

    Those hints served as the precursor for the recent hiring of Robba Benjamin as vice president and general manager for Cisco's consumer line of business. Benjamin arrived at the networking giant in August from long distance carrier Sprint, where she served as president of the company's multimedia group, and most recently, as chief of staff for the long distance division.

    "Chambers has always said we're going to be working with the Sonys of the world," said a Cisco spokesperson. "It's a huge opportunity for us. We see this as a really exciting market."

    The Cisco spokesperson refused to disclose details of the company's plans.

    Some analysts note that a consumer presence for Cisco can only feed the need for higher profit back-end networking equipment. The theory: Once a cable or digital subscriber line for high-speed Net access is installed in the home, a service provider can then approach the consumer with other network-based services, all facilitated by an advanced network.

    "It's back-end marketing," said Craig Johnson, principal analyst with industry watcher the Pita Group, a Portland, Oregon-based firm. "Cisco has to get consumers to push."

    Johnson pointed to the success that Cisco rival 3Com has had with its name recognition through the success of products like the PalmPilot and its networking cards for PCs.

    Little time to explore technology
    Unlike Cisco's typical IT audience, consumers have little time to delve into the technology that allows them to connect to the Net. They just want to connect. "It really doesn't matter what the technology is--consumers don't care," Johnson said.

    Cisco has been carpet-bombing television viewers in recent months with its first series of national ads, part of a strategy to give the company a higher profile outside of information technology organizations and savvy investors.

    In conjunction with huge bets being made on the expected convergence of voice and video traffic on a databased network scheme at the high-end of the networking market, Cisco may also be pegging the consumer user of advanced network-based home devices as a potentially receptive target.

    The company announced a deal with Sony last year to provide cable modems and associated equipment for the home, based on the emerging standard for the data-over-cable interface specification (DOCSIS). That has been followed by various deals with service providers to jointly offer cable or DSL-based services to users.

    Cisco's pact with Intel also deals with high-speed Net access via cable. And the company bought a DSL-based start-up called NetSpeed in March.