Netgear + Skype = Major Trouble for Cisco?

I am hearing that Netgear and Skype, the popular VoIP calling provider, are going to make a joint announcement at the Consumer Electronics Show tomorrow. That would be bad news for Netgear's rival Cisco.

I am hearing that Netgear and Skype, the popular VoIP calling provider, are going to make a joint announcement at the Consumer Electronics Show tomorrow. Not sure what the deal is about; I expect, Netgear will start manufacturing handsets/adapters for the Skype service. One thing is clear already, however: The news won't please Cisco, Netgear's direct competitor.

Cisco already makes adapters for VoIP services such as AOL TotalTalk. It also already manufactures a cordless phone for use with Skype. Obviously, Cisco is intent on dominating the VoIP calling market, the same way its Linksys routers dominate Wi-Fi access.

If Netgear starts putting out Skype phones as well, that would give that gearmaker's position in this market a major boost. After all, Skype has more than 50 million users worldwide. It's probably the most successful VoIP service to date. So if Netgear starts making Skype phones now, that will heat up competition between that Netgear and Cisco. That will happen at a time when dozens of companies are rushing to put out VoIP phones and adapters, as the market has finally gone mainstream.

Of course, Cisco was in a similarly tough situation a few years ago, when the Wi-Fi market exploded, and the company managed to emerge as that market's undisputed leader. We'll see if history will repeat itself with VoIP.

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