“They’re going whole hog on these devices, not just the accessories,” he said. “In addition, they can
use the Linksys name. Everyone knows that blue router with the two antennas.”
Belkin does plan to continue selling the products under the Linksys brand because it is easily recognized by consumers, Pipkin said. Linksys will continue to operate out of its headquarters in Irvine. He did not say how many Linksys employees would be brought into Belkin or how much of the management would be kept intact.
“We’ve been longtime admirers of the Linksys brand,” he said. “They’re a great Southern California success story. They’ve done a great job growing the brand.”
Cisco, with its stock trading last week for around $20, down about 40 percent from before the recession, has been moving away from consumer electronics businesses over the last few years and buying more companies to help increase its services to higher-margin corporate clients.
Cisco bought Pure Digital Technologies Inc., the seller of Flip video recorders, in 2009 for $590 million, only to stop making the devices when smartphones made them irrelevant. The Linskys sale is yet another example of Cisco’s pivot.
“There was nothing good for Cisco about the Linksys brand,” said Matt Robison, an analyst who covers Cisco at Wunderlich Securities in San Francisco. He has a buy rating on Cisco’s stock and a target price of $24. “They need to be known for providing solutions for professionals and not competing for low-margin consumer electronics revenue.”