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Who Will Cisco Acquire Next?

by January 30, 2006

Speculation is heating up about who Cisco will acquire (or partner with) next. The network and communications giant of Silicon Valley isn't shy about buying companies to leverage its position into home electronics.

In 2003 Cisco bought Linksys bringing it into the home network market. Cisco is now closing a 6.9 billion dollar deal for PVR set-top-box manufacturer Scientific-Atlanta (SA). The companies are set to close on this deal in the next couple of months. Counting Cisco's recent purchase of Danish company Kiss Technology for a cool $61 million cash, SA was the third home electronics acquisition for Cisco.

Now the speculation is: Who's next?

Those close to the industry say Cisco is giving signs they're not done yet. A journalist from Cnet claims to have a source inside Cisco and TiVo who say the companies are preparing a partnership which could possibly lead to an acquisition. Neither company is stating anything formally. But Cisco has indicated they might not be done acquiring or forming partnerships with other companies.

The Scientific-Atlanta acquisition gives Cisco a home video presence. This will provide an "end-to-end" solution for emerging technologies involving cable TV, phone and wireless network providers. Perhaps adding TiVo to the mix can perfect the SA hardware. Anyone using a Scientific Atlanta digital cable box can attest to their underwhelming performance compared to TiVo that has perfected PVR software.

With SA and Linksys we're going to see Cisco's name on some groundbreaking wireless home video gear. This sophisticated communications equipment will give Cisco a strategy for delivering new services to cable and phone companies.

Prior to Cisco's announcement that it intended to enter the home theater consumer electronics market , Chris Stevens, a vice president and general manager for Cisco's Linksys home networking division said:

"If you want to figure out where we are going, just look at the building blocks we are already assembling. The elements we already have in the portfolio provide us key capabilities that fit into an end-to-end solution."

That end-to-end solution is Cisco providing the hardware behind deals like the $200 Million dollar venture dubbed Quadruple Play .

Quadruple Play is a joint venture between Comcast, Time Warner, Cox Communications and Advance/Newhouse Communications with Sprint Nextel. Their intention is to provide the first all wireless TV/telephony super-service. Given this is the direction of entertainment and communications Cisco will be armed with wireless video devices to be there, providing that complete package.

What other high profile acquisitions could be on Cisco's horizon?

Consider North America's #3 games console manufacturer, Nintendo. Microsoft is fast becoming a key competitor to Cisco in the wireless home arena. Gaming is a big opportunity for a broadband communications manufacturer to further penetrate the living-room. Nintendo still has the number one handheld gaming devices. Nintendo DS is also a wireless communications device.

Another could be the tiny Sling Media. This is the clever startup company that created the Sling Box. Sling Box received countless accolades as one of the year's best home networking devices. It turns TV video feeds in IP packets to transmit over the internet.

Cisco isn't saying what they'll do next. But one thing is clear: Cisco is ramping up to head into your household in a big way. They're probably not finished acquiring new companies or creating partnerships to feed that considerable ambition.

Special Thanks to www.hometheaterfocus.com


About the author:

Wayde is a tech-writer and content marketing consultant in Canada s tech hub Waterloo, Ontario and Editorialist for Audioholics.com. He's a big hockey fan as you'd expect from a Canadian. Wayde is also US Army veteran, but his favorite title is just "Dad".

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