Cisco (Nasdaq: CSCO) is trying to put a lid on a rumor that it's shopping its Scientific-Atlanta set-top box business, a story the NY Post broke on Sunday.
In a company blog posted yesterday afternoon, Director of Corporate Communications John Earnhardt wrote: "Every few months there seems to be a rumor or speculative comment about our commitment to our set top box business. Let me be as clear as I can: we love set-top boxes. But, you don't have to believe me," he added, pointing to a quote from CEO John Chambers during the company's second quarter earnings call.
"In terms of set-top boxes, we are very much committed to this marketplace," said Chambers. "Our SP customers asked us to partner with them as they move from traditional set top boxes to IP set top boxes to the cloud, our Videoscape solution. Receptivity so far has been very, very good in terms of our strategy."
The Post story cited an unnamed source for the information, a point Earnhardt focused on, saying, "I hope that this clarifies any erroneous, un-sourced comments that might be out there in the marketplace."
But Light Reading Cable, in a story today, said it, too, had heard from an "industry source familiar with Cisco's plans" that the company was, in fact, "shopping it selectively," saying that it was unclear what piece of the STB business might be for sale.
The Post's Sunday article said Cisco had put the business up for sale six years after buying it for $7 billion. Cisco declined to comment on the report to the Post, and again to Light Reading Cable.
Cisco, the Post said, is looking to exit what it sees as a business in decline, STBs have shrinking margins and are on the wane as other products like smart TVs and connected devices become more common. And, it said, the company likely would focus on its Videoscape product that it rolled out at CES in January 2011. Videoscape was built using technology Cisco acquired from Scientific-Atlanta as well as three other firms it acquired in 2011: Inlet Technologies, ExtendMedia and BNI Video.
Videoscape is Cisco's vision of TV for the future, bringing together digital TV and online content with social media and communications applications to create an immersive home and mobile video entertainment experience. Although Videoscape includes a set-top box and will help pay-TV operators stay relevant in a consumer space that is rapidly evolving to demand more over-the-top content, it is equally about merging the video flow into a single, high-quality stream--with Cisco at the helm.
Chambers earlier this month said the company has seen strong demand for Videoscape as more of its customers looked to offer over-the-top solutions. The company reported a 23 percent bump to its video business in its just-reported second fiscal quarter.
Cisco last July, as a part of CEO John Chambers drive to trim $1 billion in expenses by trimming its workforce and shedding under-performing businesses, sold a key Scientific-Atlanta STB manufacturing facility located in Juarez, Mexico to Foxconn Technology Group. The sale closed late last year.
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