Cisco (NASDAQ:CSCO) Need to Focus on Juniper (NYSE:JNPR), Hewlett-Packard (NYSE:HPQ), Other Core Competitors

Cisco Systems Inc. (NASDAQ:CSCO) may have come to the place where it needs to refocus on its core businesses. Competitors like Juniper Networks (NYSE:JNPR) and Hewlett-Packard (NYSE:HPQ) are competing hard in the profitable segments of of Cisco, and it appears the need to defend and grow those areas while selling off a number of its non-core assets which are distracting, and also not working out for them.

Since Cisco reported a weak outlook and lower-than-expected margins this month, investors and analysts wonder if it would be better off without some of its less successful businesses, including consumer router unit Linksys.

"What investors would like is to see them more focused on their core market, like routers, switches and data centers, and de-emphasize or even exit some of these consumer businesses," said Morningstar analyst Grady Burkett.

"We want to see Cisco accept the fact that it's not going to grow in the mid-teens, or the 12 to 17 percent that they've been targeting, and instead focus on returning capital to shareholders and defending its core markets."

Last week, the company killed an experiment with Cisco Mail, an e-mail service that tried to compete with Google Inc (NASDAQ:GOOG) and Microsoft Corp (NASDAQ::MSFT) but never took off. Some analysts said the move was an admission that its $215 million acquisition of PostPath was a failure.




Full Story