A former colleague once described the terse taxonomy often used for the zany landscape of telecommunication
infrastructure providers. Companies with a history in traditional voice switching gear, like Lucent, were the
"Bellheads." Those with a history in data networking, like Cisco, were the "Netheads."
"What about wireless equipment companies like Ericsson?" I asked. "Are they the 'Airheads?'" I guess you had to be there, or at least attend the WebEx.
In any case, last month's $7 billion acquisition of cable equipment oligopolist Scientific Atlanta (SA) by head Nethead Cisco was no joke. The move represented the second major consumer-focused acquisition for Cisco following 2003's $500 million purchase of consumer networking company Linksys. And this July, Cisco-Linksys shelled out $61 million to Kiss Technologies, which makes favorably received networked DVD players. With a growing portfolio of boxes in the home, is Cisco becoming a more consumer-focused company? Will Daily Candy one day feature the iRoute nano that it just spotted Gwyneth buying at The Cisco Store in SoHo?
The timing of the SA acquisition would indicate that the answer is no, as the set-top box market is poised to change dramatically in the next few years. The adoption of CableCard and its successors should greatly reduce the amount of control that companies like SA and Motorola (which acquired SA's chief competitor General Instrument in 2000) have today.