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Riding a surge in consumer confidence, Cisco (NASDAQ:CSCO) has risen from the 52 week share price low of $12 to reach its current 52 week high of $20, increasing investor confidence in the technology infrastructure giant.

Only two years ago, Cisco was in financial crisis mode when it reportedly laid off 9% of its 73,000 worldwide work force or approximately 6500 employees, a figure nearly double its previous record layoff of 2000 in 2002. Cisco also cut approximately $1 Billion in costs, which included the elimination of its $300 million flip camera program.

These cuts, which were made in an effort to reduce the scope of its products and services, have allowed Cisco to increase their highly profitable areas of business such as their system networking services and router and switch sales; these currently command a reported 40% market share. These moves have appeared to pay off as Cisco reported a 44% increase in fourth quarter net revenue from 2010, which included 8% growth in router and switch sales and double digit growth in all other product and service areas.

Cisco's numbers were further bolstered by its 14% growth in the booming Asian-Pacific market, a sign that small and large based network products have continued to increase in global wide demand. As a result of these encouraging numbers, Cisco's share price has hovered around its 52 week highs of $20 the entire month of March.

It is my opinion that Cisco will continue to see significant growth the remainder of 2012 and, as a result, holds substantial dividend payout potential for its investors. Cisco has long been held as the leader of networking products and services that have allowed individuals and businesses to connect like never before. As a result of the reported 487.7 billion smartphone sales in 2011, a 63% increase from the year prior, the need for employees to be connected to their work is at an all time high. As a result, there has been an increased pressure placed on IT departments to monitor what data is being stored in portable devices that could compromise the companies' security.

Avandade recently conducted a survey that found that approximately 60% of companies have begun to realize this growing IT dilemma known as the BYOD (Bring Your Own Device) issue. As a result, many companies are now adapting the structure of its IT departments to better address the issues associated with BYOD.

The increased demand for security measures has caused Cisco to step out in front of the problem by taking what it has coined as a "holistic approach" to the problem by offering networking services that will give IT administrators better control over employees' transfer of data to their mobile devices. These measures allow IT administrators to install pin lock security measures on personal mobile devices and the ability to entirely eliminate data from a mobile device that have been stolen or lost.

Cisco's innovative approach to BYOD has already attracted many high profile clients such as Bowdoin College, University of British Columbia, Car Phone Warehouse and the city of Amsterdam. In my opinion, Cisco's proactive approach to the BYOD issue will pay substantial dividends to its investors and will contribute heavily to Cisco's continued profit margin rises that they will experience in 2012.

It appears that Cisco will initially go relatively unchallenged in their unique offering of security services to mobile devices. Alcatel Lucent (NYSE:ALU), still reeling from the 2010 Federal investigation into charges of bribery that resulted in their paying a reported $137 million in fines and civil settlements, reported a modest 1.9% growth in 2011 revenue. This growth was in large part due to the 2011 smart phone boom in the United States.

Alcatel's recent jump into the networking services market has reportedly indicated that they are making some progress in reducing Cisco's 70% market share. This in my opinion is not significant to Cisco investors, as its approach to the BYOD issue has already gathered significant support that will allow it to sustain any dip in its market share that will be brought on by Alcatel's recent involvement.

It appears that Cisco's most prevalent competitor is Hewlett Packard (NYSE:HPQ), the long time personal computer giant who entered the realm of network and data center services in 2010 when they announced their $2.7 billion purchase of 3Com.

Although HP commands a significant presence in the IT services department, it appears that HP will be more focused on providing products that are specifically designed to minimize the effects of BYOD. This intent was recently evinced in HP's announcement that they will be releasing the Window's 8 tablet that will contain increased security measures to assist IT departments in ensuring safe data transfer.

However, despite HP and Alcatel's new found desire to compete with Cisco in the networking market, it appears that Cisco's diversified earning potential that derives approximately 30% of its revenue from advanced technology services will, in my opinion, allow Cisco to further expand its market share. This advancement will result in further increases to its year-over-year gross revenue.

Cisco's narrowing approach in focusing on their highly profitable sectors has allowed them to return to the success that they experienced in 2008 when its share price exceeded $30. Based on the rising demand for security measures tied into mobile devices, the growing popularity of smart phones and Cisco's significant share percentage in a wide range of services and products, it is my opinion that Cisco's current discount price will pay large dividends to investors by the end of 2012.

Source: Cisco Is Now A Strong 'Buy' Candidate