Cisco in Your Living Room

| About: Cisco Systems, (CSCO)

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Expanding Into Consumer Electronics, Cisco Aims to Jazz Up Its Stodgy Image

  • Summary: Cisco Systems is best known for its Internet routers and switches which make up about 60% of its $28 billion in annual sales. Cisco now intends to expand its product offerings to include consumer electronics, embarking on an image change with a redesigned logo on October 2nd and with a new marketing chief, who says "... the sizzle is back at Cisco." The firm's recent $6.9 billion acquisition of set-top box maker Scientific-Atlanta fits into its new strategy as does bringing home-networking equipment, wirelessly networked DVD players, and services such as VoIP and VOD to your living room. The burden of spreading the word and making this a reality has been placed on new marketing chief Susan Bostrom who brings years of consulting experience and plans to publicize virtually everywhere possible including billboards and digital communities like Ms. Bostrom seems to have won over her colleagues, as Cisco's N. American operations head says, "She's now reached rock-star status at Cisco."
  • Comment on related stocks/ETFs: It won't be easy for Cisco Systems (NASDAQ:CSCO) to shed its image as a nuts-and-bolts equipment maker but the timing seems right for Cisco to make a play on consumers' desire to have a more wireless living room exploiting broadband Internet to make phone calls, play video games, stream audio/video, etc. Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE) have already made progress in creating a so-called wireless living room and entertainment via their respective Media Center/Extender and LocationFree technologies. Apple (NASDAQ:AAPL) offers AirTunes in conjunction with its AirPort Express which brings more power and flexibility in streaming audio wirelessly. It will be interesting to see if Cisco goes it alone or pursues alliances with CE companies.