Cisco/Linksys acquisition focuses on home electronics

Cisco's Linksys division last week acquired KiSS Technology, a Danish maker of networked home entertainment devices.

The deal, worth US$61 million, brings Cisco's Linksys group even further into the consumer electronics realm; KiSS products include Ethernet- and Wi-Fi-enabled DVD players and digital video recorders.

KiSS Technology, which has 61 employees, will be absorbed by Linksys, where the products and technologies will be integrated into the vendor's existing SOHO and consumer electronics product lines. The deal is expected to close by the end of Cisco's first fiscal-year quarter, which begins July 31.

KiSS makes DVD players, recorders and DVR devices that can connect to user's home networks, interface with networked PCs and access content from digital storage or via the Internet.

Research firm InStat says the market for networked home entertainment gadgets is on the verge of a breakout. The firm says US$3.9 billion was spent on such devices in 2004, and it expects the market to reach US$16.1 billion by 2009, with over a third of home networks having such products installed by that time.

Cisco bought home and small-office networking company Linnksys in 2003, giving the corporate/service provider vendor a big stake in the consumer/SOHO networking market. Cisco's Linksys products accounted for around 25 percent of low-end Ethernet shipments in 2004, while Cisco as a whole accounted for almost 70 percent of the market in terms of revenue, according to InStat.

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Phil Hochmuth

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