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Cisco wants to sell its home wireless router unit, Linksys, and may already have a buyer, according to several reports.Cisco has hired Barclays to shop Linksys around, sources told Bloomberg reporters Serena Saitto and Jordan Robertson. Meanwhile, rumours are circulating that Belkin might already be in the process of a deal for Linksys, a blogger that covers Cisco, Brad Reese, writes.
Belkin also sells wireless routers.
This isn’t the first time rumours about the sale of Linksys have surfaced. Last year, when Cisco hit a tailspin, reorganized and shut down its consumer videocamera unit, Flip, pundits speculated that it could get rid of Linksys, too. The rationale for shedding Linksys is that Cisco’s wants to get rid all of its consumer-only businesses and focus exclusively on enterprises and service providers.
Cisco CEO John Chambers has recently said that Cisco’s new strategy is to become an all-around enterprise IT company, with more products and services for the data centre.
Cisco bought Linksys in 2003 for $500 million in stock. The home router business has grown more competitive and has low margins, so Cisco not even be able to sell Linksys for the $500 million it paid for it, according to Reuters.
It looks as if Linksys sales may be declining, too. Cisco doesn’t report revenues on the Linksys products directly. It is lumped into a business unit it calls “other.” Revenues for the “other” unit were $220 million, down 11% over the year-ago quarter, in its most recent quarterly report.
Cisco had no comment.
UPDATED: The headline of this story originally said that that Cisco was looking to sell its router business when it should have specified Cisco’s Linksys wireless router unit.