Cisco is changing its business strategy by focusing more on becoming a top enterprise IT vendor and leaving behind its consumer business. In line with this, the company will be selling its Linksys division to Belkin. Linksys was acquired by Cisco in 2003 and this line carried a diverse range of home networking products.
How much Belkin will pay to get Linksys is still undisclosed however Cisco paid $500 million to acquire Linksys. As part of the agreement both companies will cooperate in software, service provider and other areas.
Industry insiders say this will be a smooth transition. Once the sale is complete Belkin will still honor all warranties on all purchased networking equipment as well as future Linksys products. The company will then have control over 30% of the home networking market in the United States.
Hilton Romanski, Cisco’s Vice President of Corporate Business Development, had this to say on Belkin’s intent to acquire Linksys
“Linksys is one of the leading home networking providers and has created a market-leading suite of products and services to meet customer needs. While part of Cisco, Linksys has continuously innovated, while strengthening the brand and expanding its market leadership. As part of Cisco’s commitment to service providers, we are pleased about this strategic relationship with Belkin to build on Linksys’ position of strength.”
Belkin’s CEO Chet Pipki had this to say on the acquisition
“We’re very excited about this announcement. Our two organizations share many core beliefs – we have similar beginnings and share a passion for meeting the real needs of our customers through the strengths of an entrepreneurial culture. Belkin’s ultimate goal is to be the global leader in the connected home and wireless networking space and this acquisition is an important step to realizing that vision.”
“Linksys pioneered wireless connectivity capability around the globe, and has a strong brand renowned for its premium market position, the strength of its installed base and its proven dependability. Linksys users benefit from peace of mind in their home networking environment. At Belkin we have developed great insight into consumer needs, and the experiences, solutions and products we bring to the market, including our WeMo home automation platform, will help us to grow Linksys’ market presence.”