The Network Hub

Jun 25 2008   4:07AM GMT

Cisco CEO John Chambers puts EMC acquisition rumors to rest

Shamus McGillicuddy Shamus McGillicuddy Profile: Shamus McGillicuddy

Wall Street’s buzz about a possible Cisco-EMC marriage faded this afternoon when Cisco Systems CEO John Chambers sat down with the press for a round table discussion during his company’s annual customer conference, Cisco Live. When asked whether Cisco would be acquiring a storage vendor, Chambers immediately shot down the idea, saying he couldln’t see a way for his company to differentiate itself in the storage hardware market.

“The margins aren’t good in storage devices,” Chambers added. He said prefers more modest acquisitions, companies with a large staff of engineers that’s about to take a a new product to market, for instance.

Last month, some Wall Street analysts and journalists had speculated that an EMC acquisition by Cisco might make some sense for the company, but it looks like simple wishful thinking at this point.

Chambers also revealed that Cisco is currently evaluating its potential for growth in the consumer technology market. He said Ned Hooper, senior vice president of corporate development and the consumer and small business group, owes him a plan for consumer brand development within the next 12 months.

Chambers said Cisco’s current consumer play sits at around $3.5 billion ($1 billion in business from its consumer wireless router Linksys brand and $2.5 billion from its Scientific Atlanta set-top box business). He said Hooper, who is known as a merger & acquisition guru at Cisco, is evaluating whether Cisco can push its consumer business to $10 billion.

Since Chambers also revealed that he envisions consumer adoption of Cisco’s TelePresence technology to take off once the company can offer a $10,000 price point for a home solution, a $10 billion consumer business might not be out of the question.

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