That's partly because consumers were out to buy cheaper products last quarter -- and Cisco had just finished excising cheaper products from its offerings, said Ned Hooper, chief strategy officer, on Wednesday's earnings call.
Even Flip cameras disappointed: Their sales increased 15 percent compared with a year ago, but Cisco was aiming for more than 30 percent.
"You will see us adjust appropriately to bring efficiencies to the customer segment," CEO John Chambers said on the call.
Why this matters
Consumer products represent just 2 percent of Cisco's revenues, but the company considers the consumer market a big part of its future. The company wants to transcend home networking to sell high-end products and grand architectures -- but that means getting consumers to think of Cisco as a welcome living-room guest, the kind of company Ellen Page would hang out with. No one said it would work on the first try.
Some of the products might be a little too high-end. ūmi, the lower-cased home telepresence kit, sells for US$600 plus a $25-a-month service fee -- not exactly priced to move. Analyst Mark Sue of RBC Capital Markets recently claimed Cisco has tried to spark the market with a 2-for-1 deal.
Cisco grew up as a very non-consumer company, and Chambers has said the plunge into consumer sales will be a challenge. Last quarter's misstep isn't very surprising in that light. But it shows why some people question Cisco's consumer obsession.
Recent steps in Cisco's consumer push, including Videoscape, ūmi, and more:
- Is Cisco Spread Too Thinly?
- Cisco Offers Softer Switch, Router Sales
- Cisco Reports Q2
- Why Didn't Cisco Buy Move Networks?
- Cisco Paints Inlet Into Its Videoscape
- CES 2011: Cisco Wants Videoscape to Play Nice
- CES 2011: Sitting Down With Cisco's Videoscape
- CES: Cisco Unveils Master Plan for Video
- CES 2011: Sitting Down With Cisco's Umi
- Cisco's ūmi in Action
- Verizon Ready for ūmi Mania
- Cisco's TelePresence Enters New Chamber
- Ciuses For All!
— Craig Matsumoto, West Coast Editor, Light Reading