Should Linksys rest in peace?

One week, John Chambers states that Linksys as a brand would be killed.The next week Linksys official statement declared that branding changes would be considered if it added value to customers' decision-making processes and the channel. But no one has answered the question whether Linksys will continue or cease to exist

The future for the Linksys brand looks a little jiffy, what with the recent
statements of John Chambers, President and CEO, Cisco Systems at a press
briefing in Anaheim, California. He mentioned that Linksys would eventually be
folded into the overall Cisco brand. Soon the newswires were buzzing that Cisco
would kill Linksys as a brand.

What Chambers had said was, “I would have never entered the consumer market
if I had thought it was a stand-alone or a network in itself. Any
device at any time, of any combination of networks, is our strategy. The reason
we kept the Linksys brand was because it was better known in the US.”

Now the partners in India are wondering what to make of this statement. Just
when they were digesting this, Linksys released an official statement on July 30
where Charles Giancarlo, President, Cisco-Linksys assured that the brand will
continue to be marketed and will co-exist in the market with Cisco-branded
connected home products in the near term. “We will continue to examine our
branding strategy going forward (as we have to date) and make changes if and
when these changes add value to our customers' decision-making processes and our
channel partners. What Chambers was saying was that Cisco is moving to a single
Cisco branding strategy. That's a plan that has always been in place, ever since
Cisco acquired Linksys,” he stated.

But he has not ruled out the possibility of Linksys ceasing to exist as a
brand by itself. And this has left the channel wondering. Said Rahul of Nashik-based
Real Systems, “I have just started investing in Linksys to compete with D-Link
India and Systimax, which have a stronghold in the city. Now, if the brand will
not exist, I will have to rethink whether I should stock large numbers of the
products.”

Mona Rang, PR Manager-APAC, Cisco said that the Linksys consumer and SMB
products will continue to be marketed under the Linksys brand and co-exist in
the market with Cisco branded connected home products over the near term. “We
will continue to examine our branding strategy going forward (as we have to
date) and make changes if and when these changes add value to our customers'
decision making processes and our channel partners,” she added.

	John Chambers, President and CEO, Cisco Systems
"I would have never entered the consumer market if I had thought it was a stand-alone or a network in itself. The reason we kept the Linksys brand was because it was better known in the US"

Killing a brand

When a company takes over another one, there are some things that happen to
the latter's existing brands. It could continue to function as a separate entity
or it can be assimilated into the majority company. This seems to be precisely
Cisco's gameplan for Linksys.

Linksys has the right product mix for the SMB market. Cisco has been trying
to make inroads into this segment for sometime. With Linksys in its kitty, it
has a complete product portfolio to go to customers of all genres and give the
kind of solution they need.

In such a scenario, it does not really make sense for Cisco to continue
piggy-backing on Linksys for a long time. This was made evident by Chamber's
statement that Linksys as a brand is more popular in the US than other
geographies.

But the channel in India beg to differ. S Nautiyal of Spark Technologies, a
Linksys partner, claimed that Linksys has its share of customers, who are not
influenced by Cisco. He felt that the brand should be permitted to continue on
its own, as partners can leverage on its recall to make aggressive inroads into
the local SMB market.

Srinivas Jasthi of Secunderabad-based Broadax Solutions, another Linksys
partner, agreed to this. He said that over the past few years, customer are
aware of the brand, which reflects in the fact that currently 30 percent of his
networking business comes from Linksys. “People know Linksys and ask for it by
name. It would not be advisable for Cisco to kill it. Rather it should be left
alone as a complimentary entity,” he stated.

Distributors too felt the same thing. One representative from a distribution
house, which sells Linksys in India, said that volume wise the brand contributed
only one percent to the company's overall turnover. “But with Linksys, we are
able to go with a complete suite of solutions to our channel-from the high-end
Cisco products to the mid and entry-level Linksys devices,” he claimed.

Till stocks last

Yet another distributor for a competing networking major claimed that it was
clear that well-known Linksys brand would simply fade away over the new several
months, but only when the company has exhausted its existing inventory. “We are
surprised that they did not do it yet,” he said.

However, Linksys has openly stated that it will be launching a whole new set
of products later this year, which puts a question mark on the above mentioned
statement from the distributor.

Karen Sohl, Media Relations Officer, Linksys said in a company released
statement, “Linksys will be coming out later this year with new products, and
they will be Linksys-branded.

We just had our big 'Connected Office Day' about two months ago; we have a
lot of products lined up for the holiday season, which will all be coming into
the market with 'Linksys' on them.”

Sohl agreed with Chambers' statement that Linksys needs to work on its brand
recall in geographies out of the US. This is in line with what Sanjeev Gupta,
Sales Director-Asia Pacific, Linksys had stated a month ago to DQ Channels. “We
feel that we have not even scratched the surface of the Indian networking market
and there is a lot to be done here. You can be sure that in the coming months
you will see a lot more action, activities and products from Linksys,” he had
then claimed.

But a representative of Linksys national distributor is worried because
currently Cisco and Linksys are two separate business accounts. If Linksys is
enveloped within the Cisco brand, it will mean that the distribution house will
have one less brand to boast about.

Under the condition of anonymity, the representative claimed, “I had been
hearing about this phasing out of the Linksys brand and had broached Linksys
about it. But Sanjeev Gupta reassured me that this was just a miscommunication
and there were no imminent plans to phase out Linksys. Now I am beginning to get
worried again.”

Cisco acquired Linksys Inc in March 2003 for $500 million, which marked its
first strategic acquisition in consumer and home networking. Since then Cisco
announced that it will go to customers with a joint offering to reach out to a
wider base of products.

Vinita Bhatia

vinitavs@cybermedia.co.in