It’s been a big week for deal-making over at Cisco Systems. One day after announcing the blockbuster purchase of tiny Israeli mobile networking startup Intucell for $475 million, Cisco is turning around and selling one of its biggest former acquisitions, Linksys, to home-networking competitor Belkin. No financial details were revealed.
Privately held Belkin said that after the acquisition, which it expects to close in March, it will have 30 percent of the U.S. retail home and small business networking market. Furthermore, Belkin said it would continue to support all Cisco-made Linksys products and maintain the Linksys brand, just as Cisco chose to do last decade. Belkin hopes to integrate the Linksys line with its home networking portfolio.
“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,” Belkin CEO Chet Pipkin said in a statement. “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.”
Furthermore, when the companies are no longer competing head to head, they’ll be free to partner. Belkin and Cisco said they would form strategic partnerships in “retail distribution, strategic marketing and products for the service provider market.” They didn’t give many details, but it sounds like Cisco and Belkin might tackle the emerging connected home space together, with Cisco handling the backend platform software and Belkin the consumer-facing gadgetry.
As for Cisco, it’s certainly not abandoning the Wi-Fi market, it’s just going back to its roots, focusing on enterprise and service providers. In fact, when it comes to enterprise Wi-Fi, Cisco is doubling up on its investment. It bought Meraki Networks in November for $1.2 billion.