Requiem For A Heavyweight: Linksys On The Block

Discussion in 'LAN & WAN Article Discussions' started by thetoad30, Dec 18, 2012.

  1. thetoad30

    thetoad30 Regular Contributor

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    I think where Cisco went wrong, like a lot of other companies, was that it was a high-end company first, and tried to get a high-volume, low-margin company to work.

    Linksys used to be great. Then Cisco bought them and killed them. Example? Linksys WRT54G. The first two versions were great. In fact, I still have one that works. They even sold accessories (antennas) and stands for these. This was a great product (the first versions, anyway).

    Then they cheapened them up. Cut features, made them fall apart by choosing lower-quality components. So consumers switched to the "other" products since for the same price or less most times, you could get a better product.

    Cisco had just counted on using the branding and the "power" behind the name - and failed.

    I kind of liken this to Honda and Acura. I have a Honda and love it - but they're seriously standing still in features these days. Yet an Acura is 20-50K more.

    Sometimes it is better for companies to focus on one thing instead of trying to upsell the market.

    Just my thoughts I suppose. Shame to see Linksys going this way - I hope they pull through and can once again compete.
     
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  3. stevech

    stevech Part of the Furniture

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    I think this common occurrence (buy 'em, kill 'em) is because the US lacks laws that require officers of the company to be salaried employees. Instead, we have execs on 5 yr contracts with incentives and bonuses.

    They meet their goals by any brutal means, get the bonus, then boogy-on to the next employment contract. Leaving a train wreck behind.

    I must say that Cisco left Linksys alone as a wholly owned arm's length subsidiary for many years more than others have done.
     
  4. thexile

    thexile Occasional Visitor

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    Cisco Cloud Connect is another nail in the coffin for Linksys.
     
  5. Dr. Strangelove

    Dr. Strangelove New Around Here

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    Linksys on the block, and Flip dead. And, they only spent $600M and had Flip for two years before they canned it.

    Looks like Cisco is cleaning house...

    Doc
     
    Last edited: Dec 20, 2012
  6. thiggins

    thiggins Mr. Easy Staff Member

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    They killed Flip awhile ago.
     
  7. stevech

    stevech Part of the Furniture

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    Cisco's WiFi from their Aironet acquisition is apparently still going strong, in the upper end of SOHO and in enterprise.

    I wonder how their acquisition of AirEspace has gone... against Aruba. These are "thin-AP" architectures, with managed APs using a controller. Of course, not for the home or most SOHOs or SMB's.

    I'm surprised that Cisco has kept Linksys going as long as it has - with the gross margins so tiny in home WiFi.
     
  8. Unregistered

    Unregistered Guest

    Ryn=an

    They've been busy. They recently acquired Meraki, which has me nervous as I like Meraki right now and their products/services have been continuously improving. And now Cisco is dumping Linksys. Meraki doesn't really cater to consumers, but what is Cisco planning?
     
  9. sfx2000

    sfx2000 Very Senior Member

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    Flip died a natural death...

    Three things happened - IOS, Android, and Omnivision introducing a camera module with good enough resolution and framerates - once every smartphone had that capability and better ease for those Flip camera use-cases, the business evaporated...

    Cisco didn't see a need to get into the low-margin smartphone business when their interests (and profits) were elsewhere..

    As smartphones improve - Personal Navigation Devices and Point-and-Shoot cameras will see the same effect...
     
  10. sfx2000

    sfx2000 Very Senior Member

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    Cisco has always been about large scale deployments in the enterprise/hospitality markets - Meraki is a good fit - Linksys was not at the end of the day...

    Different markets...
     
  11. sfx2000

    sfx2000 Very Senior Member

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    I like my Acura TSX - it was a only couple of grand more than the equivalent Honda Accord - but it drives better, there's less of them on the road, and when I take the car in for service - they treat me nice and give me a free loaner and get a free car wash by hot teenage virgins in bikinis - just kidding there - but Acura does have a better support experience during ownership over what the mainline Honda dealers offer - not much different that Toyota/Lexus... that level of service - it needs to be either made up on the front end (price to acquire) or on the backend (paid support)

    It really comes down to the numbers - how much money can be made for each device, and how can one wrap up the customer in support contracts...

    Linksys, being SOHO, was a market segment that needed free support for 90 day/1 year... Cisco saw this, and moved out of that segment.

    To companies like Cisco - the gear is not where the money is - it's in the support contracts....
     
    Last edited: Jan 24, 2013

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