Cisco Says New Carrier Routers Add Customers Comcast, AT&T
Cisco Systems Inc. (CSCO), under fire from investors for spreading itself too thin, said a new routing system is winning customers at a faster pace than the original model in 2004.
The CRS-3, which starts at $90,000 and ranges up into the millions of dollars, has been adopted by Comcast Corp., AT&T Inc. and about 80 other customers, San Jose, California-based Cisco said today in an e-mailed statement. The router helps phone companies and other service providers move massive amounts of data and video through networks.
The product represents a bright spot for Cisco at a time when it’s tinkering with its strategy. The company has vowed to refocus on key areas after investors bid down the shares over the past year, erasing about $48 billion in market value. The new routers, which compete with offerings from Juniper Networks Inc. (JNPR), help deal with the strain of mobile-device users increasingly surfing the Web and watching video.
“This is what’s needed to scale the Internet,” Suraj Shetty, a vice president at Cisco, said in an interview. “In the last 18 to 24 months there has been rapid adoption of high- quality, premium video coming over the Internet to devices at your home, whether it’s your iPad, laptop or phone.”
In a 1,500-word e-mail to employees last week, Chief Executive Officer John Chambers depicted an organization that had lost focus and been slow to make decisions. Cisco, the world’s largest maker of networking gear, has seen profitability erode and is struggling to meet sales growth goals. At the same time, it’s pushing into businesses such as consumer video gadgets, digital-music storage and home-audio networking.
At an investor conference last week in San Francisco, Chambers said that Cisco’s high-end routers, which direct Internet traffic, were in a “very good competitive position.”
Cisco fell 18 cents to $17.47 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have declined 34 percent in the past year.
To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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