Requiem For A Heavyweight: Linksys On The Block

[thetoad30]

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.

 

[stevech]

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.

 

[thexile]

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

 

[Dr. Strangelove]

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

 

[thiggins]

They killed Flip awhile ago.

 

[stevech]

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.

 

[Unregistered]

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?

 

[sfx2000]

They killed Flip awhile ago.

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...

 

[sfx2000]

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?

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...

 

[sfx2000]

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.

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....