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Wednesday, Oct 16
Cisco reportedly ending OEM deal with rival Polycom
- William Blair's Jason Ader reports Cisco (CSCO -0.3%) is ending an OEM deal with Polycom (PLCM -0.6%) through which the latter supplies the former with conferencing phones. The report has led Polycom to tick lower on an up day for equities.
- As its is, Cisco and Polycom are fierce rivals in a videoconferencing equipment market pressured by a transition to cheaper hardware and software-based systems.
- IDC estimates Cisco had 41% of the videoconferencing equipment market in Q2, and Polycom 29.2%. Cisco's equipment sales are believed to have fallen 7.5% Y/Y, and Polycom's 14.8%.
- Ader thinks the loss of the Cisco deal could impact Polycom's 2014 revenue and EPS by $50M and $0.08, respectively.