Cisco Aims at Mobile Market by Air, Sea and Land
Wednesday October 2, 11:02 am ET
By Eric Auchard and Ben Klayman
biz.yahoo.com
NEW YORK (Reuters) - Cisco Systems Inc. (NasdaqNM:CSCO) unveiled on Wednesday new wireless gear for what it calls "networks in motion," equipping trucker drivers, police patrols, even tank commanders, with constant data access.
Cisco, the world's dominant supplier of fixed-line Internet routers for corporate and public communications networks, is eyeing a mobile market where wireless equipment makers Nokia (NOK1V.HE) (NYSE:NOK), Ericsson (Stockholm:ERICb.ST - News; NasdaqNM:ERICY) and Siemens (XETRA:SIEG.DE) now lead.
Cisco, of San Jose, California, said its new "Cisco Mobile Access Router" for vehicles will bring secure, industrial strength access into existing organizational networks -- whether for companies, public safety agencies or the military.
The size of the initial market is small, but is expected to generate from hundreds of millions to even billions of dollars in revenue over the long term, the company said.
"Cisco has clearly found a piece of the wireless market where they can play to their strengths in data networking. It is a natural fit for them," said Sarah Kim, a wireless market analyst with research firm Yankee Group in Boston.
Also on Wednesday, UBS Warburg cut its earnings and revenue estimates for Cisco and lowered its price target for the stock based on recent weakness in information technology spending, the profit warning from smaller rival Extreme Networks Inc. (NasdaqNM:EXTR), and softness in Japanese and European markets.
Analyst Nikos Theodosopoulos lowered his price target to $14 from $15.50 but maintained his "buy" rating.
The new 3200 router is designed to hop between different wireless networks invisibly, providing uninterrupted access to an organization's internal networks while on the move.
The product would detect mobile network links as vehicles travel via location-finding satellite, neighborhood "Wi-Fi" wireless networks or hybrid voice and data networks. Officials said they envision the new "3200" model router being used in automobiles, airplanes, ships, tanks, cranes and trains.
"If the data networks were perfect, there would be no market for a product like this," Kim said, adding that "Cisco can take advantage of the shortfalls of the wireless industry -- the fact wireless data networks don't have coverage everywhere and the quality issues where coverage does exist."
Initially, the target is public safety, air transport and military markets. Consumers would benefit only indirectly from the ability of, for example, emergency workers to gain instant access to an accident victim's health records from the field.
"The point of the mobile access router is that it extends the edge of the network to a new frontier, what we call 'networks in motion,"' Paulette Alatmaier, the vice president of Cisco's communications access business, told Reuters.
The Cisco 3200 router began shipping last week, she said. Prices range from $5,000 to $10,000, depending on data volumes and other features. Additional capability will be added to the product over the next few months.
The new mini router, which can fit in the palm of one's hand, can be used with any wireless technology standard and is also available now in Europe and Asia, Cisco said.
Using the router, a police officer could stay connected to existing police band networks while driving around a city. The officer could then use a laptop, video camera, or fingerprint machine to send and receive data from the precinct station.
As the car moved into an overload network "hot spots," the router would automatically switch to a very high-capacity link or hop onto conventional commercial data networks if need be, Cisco said. |
