| Cisco acquisition of Scientific-Atlanta could revolutionise IP market |
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NEW YORK: Cisco Systems, the world’s biggest maker of internet routing gear, could soon determine the way you order a movie, song or television program on the Internet. The San Jose, Calif. Based company yesterday agreed to acquire Scientific-Atlanta, a leading maker of television set top boxes in a deal that could revolutionise the IP market.
With the all-cash £4bn acquisition deal, Cisco will be able to combine resources to develop a platform that will deliver digital video, data and wireless services across a range of networked appliances inside the home – the home theater system, stereo, MP3 player and cellphone.
The networking giant’s current senior vice president Mike Volpi will head the new division of cable television technology.
This acquisition marks the third year of the company’s new thrust into the market for hi-tech consumer equipment. In 2003 the company bought Linksys Group a maker of routing equipment; this acquisition is said to have given a new direction to the group. Earlier this year, it acquired KiSS Technology the maker of networked DVD players.
For Cisco, Scientific-Atlanta, the second-largest maker of cable TV set top boxes, is a significant deal for obvious reasons. It will give it direct access to millions of homes. The deal leaves only one other dominating force in the market for set top boxes - Motorola.
The group now aims for a growth rate of 14 percent to 16 percent for their new division which would help it achieve the 10 percent to 15 percent target for overall growth. It would also help boost investor confidence which seems to have been stuck in the 2003 levels. The biggest advantage however, will be expertise in video services which the deal brings to the table. It will mean a new source of revenue from cable and telecom providers.
Cisco is now looking to “reduce the complexity of converging data, voice, video and IP in both a fixed and mobile environment" the company’s chief executive John Chambers said.
Analysts and market watchers expect explosive growth in the service provider market as an increasing number of households get online with faster broadband connections.
The deal was approved by the board of directors of both companies and would be completed next spring.
Posted
on : Sun, 20 Nov 2005 01:35 GMT | General News
By : Anne Philips
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