Cisco's marketing expertise won't help with its consumer-electronics plans, analysts say

Craig Matsumoto, Editor-in-Chief, Light Reading

January 18, 2007

3 Min Read
Cisco's Consumer Branding Crisis

At CES, Cisco Systems Inc. (Nasdaq: CSCO) showed off grand ambitions for consumer networks, but analysts say the company is light years away from being a household name in consumer electronics.

Last week's CES keynote from CEO John Chambers laid out Cisco's ambitions, which he said are in the "outline" stage, with details undetermined. (See CES: Cisco Preps Home Invasion.) But so far, analysts don't think Cisco is showing much consumer savvy.

"Cisco doesn't have the cachet with 19-year-olds," says Zeus Kerravala, an analyst with Yankee Group Research Inc. "With the consumer, it's about branding and the user experience, and less about good technology. Cisco will have to go through some growing pains."

Cisco has consumer products from its Linksys and Scientific Atlanta acquisitions. But neither brand is particularly famous on a consumer scale. Arguably, its most famous consumer product is the iPhone, and that's only because Apple Inc. (Nasdaq: AAPL) decided to use the name. (See Cisco Files iPhone Suit). Cisco declined to comment for this story (even the non-iPhone parts).

Even Cisco's newer consumer products so far have been closer to Cisco's IT heritage -- network-attached storage that was introduced at CES, for instance. And there's recent talk, reported by Unstrung, that Cisco could get into the market for home base stations. (See Cisco Eyes Home Base.)

What Cisco needs, some analysts say, is a product that gets in the consumer's face. "The thing about being a consumer electronics company is gaining visibility in that role. Cisco is a trusted brand, but it isn't something you buy to hook up and make your stereo work," says Rob Enderle, principal of the (what else?) Enderle Group .

Cisco might be thinking along these lines with its home media adapter, a potential Apple iTV competitor that Cisco showed to a select few at CES. (See Cisco Adapts to iTV .) And analysts pointed to other possibilities related to TV.

"What would be interesting is: What if Cisco made an HDTV?" Kerravala says. "They own the network up to the set-top box. That would be one way to get the Cisco logo out in front of people."

Enderle thinks a new set-top product -- something beyond the Scientific Atlanta box that the cable company hands you -- would make more sense for Cisco. It's a capability the company already has, and it would give Cisco some brand cachet when it comes to moving data around the home, he says.

Cisco can't count on its marketing savvy to carry the day, because it's all IT-based. Consider the way it sells its consumer products: It's Linksys, not Cisco, that shows up on the shelves of Target and Wal-Mart, the kinds of stores where most consumer electronics are sold. Richard Doherty, principal analyst of The Envisioneering Group points out: "Consumer Electronics doesn't start and end at Fry's."

Tapping outside expertise could help. "I'd love to see a business-card list of executives Cisco has hired from the marketing side of consumer electronics," says Doherty. "You've got to connect with the audience."

It's possible Cisco could end up being the behind-the-scenes company, making all this network stuff happen while not providing any of the equipment the customer touches. The open-standards philosophy Chambers preached certainly speaks to that idea. But analysts don't see Cisco being happy in that role.

"I don't think they will be satisfied being just the plumbers. I don't think they spent all that money changing the logo just to be plumbers," Kerravala says.

Analysts agree that Cisco's future appears to be tied to finding growth in those areas that are closer to consumers and farther away from routers and switches. "You know why Cisco is even in this position? They own every bit of the market they're in," Kerravala says.

— Craig Matsumoto, Senior Editor, Light Reading

About the Author(s)

Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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