January 30, 2006 4:00 AM PST

Is TiVo next on Cisco's push into homes?

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The adapter fits into wireless routers or other consumer electronics products, and it uses multiple antennae to steer wireless signals around obstacles.

Ruckus also uses traffic management software to enable service providers to remotely monitor and manage the quality of the service. Because the technology can be easily embedded into existing hardware, Cisco could add it into the Scientific-Atlanta set-top box or use it in the Kiss DVR product.

Another possible acquisition candidate for Cisco is Nintendo, the No. 3 game console maker in the U.S.

A stretch? Not really. Microsoft, which is emerging as a key competitor to Cisco in the home entertainment market, is already in this market with the Xbox 360. Gaming has already proved to be a strong application for broadband, so it makes sense that Cisco would want to own a game device to help drive more traffic on its network. With its popular GameBoy product, Nintendo would also provide Cisco an entree into the mobile-handheld market.

Another possible target could be the start-up Sling Media, maker of the Sling Box. Sling essentially turns video feeds into IP packets and sends the signal out again over the Internet.

Then there's TiVo. It has a well-developed software interface, and it has one of the most recognizable brands in the DVR market.

But there are several reasons a partnership with TiVo is much more likely than an acquisition. For one, Cisco already has DVR functionality as part of the set-top boxes it's acquiring from Scientific-Atlanta. Second, TiVo carries a $460 million market capitalization. Third, TiVo suffered a serious blow in distribution when one of its major partners, DirecTV, decided to end a reseller relationship. TiVo now has a distribution deal with Comcast.

"The deal stopper for Cisco would probably be the fact that TiVo is losing customers," said Albert Lin, an analyst with American Technology Research.

More big Cisco home entertainment moves may take some time to happen.

"Cisco will go slowly in digesting Scientific-Atlanta," said Murray Arenson, a senior analyst at Ferris Baker Watts. "There are still a lot of hanging question marks to answer before they go out and acquire anything else in this market."

CNET News.com reporters Tom Krazit and Stefanie Olsen contributed to this report.

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13 comments

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Direct to consumer? Why?
This would seem to indicate that either the enterprise market is becoming a dead end or that Cisco truly believes the home market is poised for rapid growth.

While both scenarios may be partially true, the troubling thing is how will Cisco handle the fickle consumer market when Cisco has no real history in dealing with consumer level products?
Posted by R. U. Sirius (745 comments )
Reply Link Flag
I doubt it
I doubt that they would go direct to the consumer as this story implies - it would make more sense to leave the customer relations and sales to third parties such as large electronic/computer stores.

The only part of this story that makes any sense is that soon an easy to use device that has the power to route large amounts of data around the home will be desired by more and more people - especially those with dvrs that want to transfer their media to other devices.
Posted by ajbright (447 comments )
Link Flag
I doubt it
I doubt that they would go direct to the consumer as this story implies - it would make more sense to leave the customer relations and sales to third parties such as large electronic/computer stores.

The only part of this story that makes any sense is that soon an easy to use device that has the power to route large amounts of data around the home will be desired by more and more people - especially those with dvrs that want to transfer their media to other devices.
Posted by ajbright (447 comments )
Link Flag
Its the software, stupid!
Cisco may be great in routers and network devices, but they would be doing everyone a favor it they acquired TIVO. As one who has used an SA DVR from Time Warner for several years, I KNOW the Tivo software is vastly superior. SA and the other set-top builders make products to MSO spec, not to consumer electronics spec. Put a Tivo in an SA box and you would have a killer device. Its all about the software (if the iPod hasn't taught us anything else...)
Posted by flipj (1 comment )
Reply Link Flag
Does Tivo even make money? Reminds me when Novell bought WordPerfect
Even if they do, they'll have to compete with hard drives integrated into cable boxes, and Windows Media Center (which has a free guide).

I think the only real company that might purchase Tivo would be AAPL since they already have video/audio for sale.

Cisco purchasing Tivo is stupid. Reminds me when Novell purchased WordPerfect.
Posted by bobby_brady (765 comments )
Reply Link Flag
Not really
They just bought Scientific Atlanta(so they already "compete with hard drives integrated into cable boxes", I have an SA cable box, I have a friend with TiVo and that is vastly superior to mine. Motorola's software is vastly superior having been a comcast customer, had I not moved I would not have changed for that box alone. Put TiVo into an SA box and they become #1 in set top boxes by a large margin. They get the TiVo subscribers, plus all of the cable companies who use the boxes. I would beg Time Warner to get a TiVo comparable box and get rid of my current box.
Posted by schubb (202 comments )
Link Flag
Did I miss something?
It seems the point is that Cisco, long known for its enterprise devices, is now looking to own, develop, manufacture, whatever, consumer oriented devices.
Most of the organizations mentioned as acquisitions or probable targets already have direct contact with consumers so there is no need for Cisco to reinvent that wheel.
I think Cisco is able to foresee something many computer techs have denied for a long time... massive increases in home use of networking, storage, and interface devices resulting from convergence of almost every system in the home. Not just entertainment but HVAC, nutritional logistics, health monitoring, etc., etc., etc.
Cisco has the reputation, the technological prowess, and the vision to do more than just "ride the wave". They are maneuvering into a position to shake things up and create the waves.
Posted by El Kabong (100 comments )
Reply Link Flag
Nintnedo No. 3?
Hmm.. Maybe be so. With all those consoles they make (GameBoy,
GameCube, DS) it would not seem likely that Microsoft would be
selling more conosles than Nintendo. Can somebody please verify
that XBOX and XBOX 360 combined outsell Nintendo's offerings?
Nintendo is a very profitable company as well.. As for XBOX, well
we all know how it stays in business while it loses billions of
dollars. I highly doubt Nintendo will be bought by Cisco.
Posted by johnnybluffsf (1 comment )
Reply Link Flag
indeed
the gamecube is in last in terms of sales in the US. but with the GBA and the DS, they've sold much more systems.

Xbox is far behind both the gamecube and ps2 in japan, with the ps2 being in the lead in console sales...(due partly, i think, to the fact that the ps2 was poorly manufactured and people still go back to them to get a replacement system. i was done with them after my ps2 mysteriously stopped reading most discs.)
anyway...now, nintendo is doing very well in japan. 9 out of the top ten best selling games right now are nintendo games. and 7 out of the 10 are actually published by nintendo.
the gamecube gets so little attention in the US cause gamers here are stupid! they have no idea what makes a game good. they'll buy anything...which is why a game like "25 To Life" is on the top 5...for both the ps2 and xbox. the game got horrible ratings but i guess they'd rather play garbage, then risk their dignity by playing nintendo made games, which in their opinions, are for kids.
Posted by shaqueefa (3 comments )
Link Flag
The Nintendo suggestion is naive and comical
I'm sorry, but the suggestion that Nintendo would sell out to Cisco
is cub-reporter stuff: naive and downright funny. I laughed out
loud when I read this. Nintendo turned down a buyout from
Microsoft as MS was readying the Xbox, and Microsoft would have
actually been a good fit.

Who comes up with this stuff?
Posted by (2 comments )
Reply Link Flag
MS's attempt to purchase Nintendo
To be precise:

From the Book: Opening the Xbox

"Microsoft was at one point all set to plunk down 25 billion for the Japanese game giant. As the book describes, Nintendo's U.S. president Minoru Arakawa wasn't sure what to think when Microsoft made the offer. "I was surprised," Arakawa admitted. "We didn't need the money. I thought it was a joke.""

25 Billion, and Nintendo turned it down. Exactly how much is Nintendo really on sale for then?
Posted by AlphaTwo (10 comments )
Reply Link Flag
 

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