Cisco Sells Linksys to Belkin, Exits Home Networking Market

Confirming rumors that surfaced a month ago, Cisco Systems (NADAQ: CSCO) has sold off Linksys to Belkin. Cisco had acquired Linksys for $500 million about 10 years ago in what proved to be an uneven foray into home networking. Belkin, the consumer electronics peripherals giant, certainly will try to make more of the well-known brand. Here are the details of this breaking story…

When the deal closes sometime in the next two months, Belkin will lay claim to some 30 percent of the U.S. retail home and small business networking market, according to the company. Belkin is privately-held and neither company disclosed terms of the transaction.

As part of the deal, Cisco will help Belkin with retail distribution, strategic marketing and products for the service provider market. In addition, Belkin will be able to tap into Cisco’s specialized software across its product lines and leverage the networking vendor’s technical innovation capabilities, officials said.

“Combined, Belkin and Linksys will create a world-class consumer networking technology provider with complementary innovation and engineering strategies,” wrote Hilton Romanski, Cisco corporate business development vice president, in a blog post. “Linksys will enhance Belkin’s capabilities to meet the needs of OEMs, as well as provide access to a large user base. Linksys has long been an important member of the Cisco family and we are confident that we have found the best buyer in Belkin.”

Belkin will hold onto the Linksys brand, support Linksys products and honor valid warranties for current and future Linksys products, officials said.

“Belkin’s ultimate goal is to be the global leader in the connected home and wireless networking space and this acquisition is an important step to realizing that vision,” said Chet Pipkin, Belkin chief executive.

The Belkin deal ends Cisco’s dalliance with the home consumer market, a segment so apart from the vendor’s knitting that it is striking how long it held on to Linksys. In fairness to Cisco, Linksys’ high brand recognition, strong retail and reseller presence and popularity with consumers and SMBs probably made for a bittersweet parting but still a smart and necessary move.