It’s Christmas in July at Cisco Systems Inc.’s expanding consumer products empire in Irvine.
The San Jose-based networking company is combining recent acquisitions into a newly formed consumer group in Irvine.
The moves build on Cisco’s $500 million acquisition six years ago of Irvine’s Linksys LLC, which makes routers and other networking devices for consumers.
Linksys’ campus near the University of California, Irvine, has become the hub for Cisco’s consumer efforts, which are designed to spur sales of the company’s routers and other networking gear.
Cisco recently paid $590 million for San Francisco’s Pure Digital Technologies Inc., maker of the hit handheld Flip video camera.
The deal put Pure Digital Chief Executive Jonathan Kaplan in charge of Cisco’s consumer business from San Francisco. A trio of executives in Irvine reports to him.
Kaplan is viewed by many as the Steve Jobs of the consumer group,bringing a hip sense of YouTube generation style to Cisco with a focus on sleek design and ease of use.
“Kaplan has that consumer DNA, which we need,” said Chris White, vice president of global sales for Cisco’s consumer group in Irvine. “One of his principles for the consumer business is, “Do you want it for Christmas? As simple as that is, it’s such a great grounding for all of us to work around.”
Some 2 million Flips have been sold North America and Britain since it debuted a little more than two years ago. The camcorders, which use flash memory, go for $120 to $300.
The Flips “are bucking the trend of the consumer downturn,” White said.
The camcorders fit with what Cisco is doing in Irvine, according to Greg Memo, vice president and general manager.
In Irvine, the company designs and markets routers and other devices that let people link household computers and share Internet access. Now the Irvine operation is handling marketing and administration for Flip, with engineering done in San Francisco.
“The ability to go and have a hit product with a brand that was gaining momentum, that’s where we saw synergy with what we’ve already been doing here,” Memo said.
Like Apple Inc.’s iPod, Flip cameras are small enough to fit into a pocket and have touch-sensor buttons. They’re virtually plug and play.
Linksys workers themselves are fans.
“When we put this on our employee purchase program, on day one, we sold a huge amount,” Linksys spokeswoman Karen Sohl said. “They were really excited about the product.”
Cisco sees the increasing use of digital video on the Internet driving sales of networking gear. The bulk of its some $38 billion in yearly sales is from heavy duty gear used by corporations and governments.
“We sell these thumping big switches and routers to large corporations,” White said. “It’s not exactly something you’ll find on anyone’s Christmas list. I am not going to buy a half a million dollar router for my mom.”
The Irvine operation includes another recent acquisition: Seattle’s Pure Networks Inc., which Cisco bought for $120 million last year.
Pure Networks makes easy-to-use home networking software that gets loaded onto Linksys routers.
“We’ve got a pretty interesting arsenal with Linksys, the Pure Networks software and the Flip acquisitions along with a lot of the bigger assets of Cisco,” White said. “We’ve got a lot of the pieces of the puzzle coming together.”
Cisco has ambitious growth plans for its consumer business.
The unit sees about $1 billion in yearly revenue, with a big chunk coming from Linksys.
“We have large designs on growth,” said Marna Bullard, vice president of worldwide marketing. “The intent is to grow the consumer business group into a $10 billion organization.”
The humble consumer router, a Linksys staple, now is seen as a hub for the volumes of data consumers need to keep track of, store and access on multiple devices.
“We really see the historical side of Linksys,the router,as key,” Bullard said.
Earlier this year, Linksys launched a media hub for the home that collects and organizes digital photos, videos and songs that are spread among various devices.
Cisco, which has about 350 workers here, is tapping Linksys’ global network of distributors and stores to get the Flip on shelves worldwide in the next year or so.
The changes show the significance of Linksys to Cisco. But they also mark the end of an era locally as the brand gets further entrenched in Cisco.
With the ushering in of new executives, there remain few footprints of husband and wife entrepreneurs Victor and Janie Tsao, who started Linksys out of their Irvine garage in 1988.
After handing over day-to-day operations of Linksys to Polaroid Corp. executive Michael Pocock in 2005, the two went to work for Cisco in China for a few years.
Pocock left Linksys for personal health reasons last year. The Tsaos since have moved on from Cisco and Linksys altogether.
They’ve stepped up their involvement with Newport Beach-based venture capital firm Miven LLC, which was started in 2005 and is backed by Victor Tsao.
The Linksys brand name has undergone several evolutions under Cisco. It’s sold today as Linksys by Cisco in stores and online.
