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Monday, November 28, 2005

Why did Cisco Systems acquire Scientific-Atlanta?


I believe that Cisco Systems' move to acquire Scientific-Atlanta the maker of Set Top Boxes (STB) is so wise even though it cost them $6.9 Billion..

Alot of people have not realized that the world is moving towards IP convergence.. The Treo!.. The Net/Telephones/TV who can't live without them now adays?

Cisco's core business is Networking.. and it embarked into the IP Telephony scene a few years back.. and I remember having a conversation with someone from Nortel, the world leading communication equipment company, about the move of companies like Cisco and 3Com into their turf, and he was telling me that everyone is trying to get a piece of the pie. even those who had no experience in the Telephone business..

Well, at that time.. it was understandable that Cisco had nothing to do with telephony.. but IP telephony was a different case..

The whole idea behind the convergence of the 3 services is that you will be getting your Internet/Phone/TV from 1 source.. 1 fiber optic cable!.. so there is no need to have multiple cables everywhere and no co-ax cables to be seen in homes or offices no more..

Now, after Cisco's acquisition of Scientific-Atlanta.. Cisco is gearing itself to be one of the leaders in convergence solutions since it has all 3 elements of the deal which are Networking/VoIP/IPTV... and that in my own opinion the reason that they acquired Scientific-Atlanta.. and this is my reply to what news agencies have been reporting that Cisco is venturing outside it's core business... but that infact is it's core business from now on. How to be the dominant convergence solutions provider.

IPTV is basically TV over Internet Protocol which means that you will be getting your TV channels through your internet connection.. which means better control on what you see.. and real time video on demand, interactive TV, your own showtimes, and many other options that are only possible with the power of the internet.
posted by @ 11/28/2005 01:30:00 PM Google It!


Comments on "Why did Cisco Systems acquire Scientific-Atlanta?"

 

Blogger moryarti said ... (28 November, 2005 16:20) : 

Quite informative .. Seems like you come from an IT background cause your analysis is tech-centric... :)

Can i add, if you don't mind, my $0.02 worth?

They also did it for 2 reasons:

1) Cisco's persistence to tap into the home/consumer market (remember Linksys)?

2) Don't forget the thing that made cisco grow beyond proportions was the joyride it was having in the late 90s with the service provider (SP) market... ISPs, telcos..etc (during the GSM and dot.com explosion)

2002 and 2003 were not that great for Cisco because it was running out of SP business (CIS shares reached record laws - $12 or $13 - don't remember exactly ) ..

With this new acquisition, Cisco is hoping to claim back its spot in service provider market with demand for new media (IPTV) expected to be next best thing ...

 

Blogger YAB said ... (28 November, 2005 18:15) : 

Add all you like Moryarti, I really enjoy reading your comments and posts..

To Begin, My background is not in IT but I have alot of interest in IT..

Well.. Cisco's tapping into the H/HB market is inevitable since most Set Top Boxes are marketed for H/HB users.. and ofcourse it's LinkSys brand that brought it to the center of the action when Wi-Fi almost became a need for all computer users.. I remember the first Wi-Fi Access point that I got in 1998 was a LinkSys.. but that was long before Cisco's acquisition of LinkSys in 2003..

Anyway, IPTV will reach it's peak in 2025... and will see a high rise in the number of users in 2010.. since the Congress has passed the Digital TV Bill which ends all Analogue TV Broadcasts by the end of Day 31/12/2008

So are you buying CSCO? hehe
it's at $17.55 right now.. which is almost close to August Low.

in fact CSCO has seen a downfall since 2001 reaching the lowest trading price for the past 5 years in October 2002 where the share fell below 10 dollars which is almost the same trading price of the share in 1997 when it was on the rise..

I tried to read into the charts before I posted the article to see the impact of the news announcements and apparently the share has jumped almost 50 cents.

So, there's a convergence explosion comming up.. and most probably Cisco and Microsoft are going to lead it..

 

Blogger YAB said ... (28 November, 2005 18:23) : 

BTW, I had to type that comment twice.. the first time I got an error that erased what I wrote.. so I had to rethink what I had written all over again.. LOL

 

Blogger YAB said ... (28 November, 2005 18:35) : 

I'm Sorry again, I got the first wireless Access point in 2001.. and the the prices right now are almost what they were in 1998.. that's where the mix up happened :)

So hillarious, I haven't slept for over 24 hours now.. I hope I could fix my sleep schedule today.

 

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