Chambers: Cisco 'very much committed' to set-tops

Cisco (Nasdaq: CSCO) may face new competition in the set-top space from consumer electronics devices such as Microsoft's (Nasdaq: MSFT) Xbox and broadband connected TVs that can deliver cable programming, but CEO John Chambers says the top cable technology vendor remains "very much committed" to its set-top business.

Chambers

With Cisco customers such as Comcast (Nasdaq: CMCSA) looking to rely on a cloud-based architecture that can deliver both cable and IP video programming to subscribers, the set-top will remain an essential device, Chambers said on the company's earnings call earlier this week.

"I think for anybody that thought we'd leave the set-top boxes, they just didn't understand service providers," Chambers said, noting that Cisco's $100 million cash acquisition last month of BNI Video will give Cisco tools that can help operators transition from traditional set-tops to IP set-tops. "We have an architecture there that makes a huge difference for them," he added.

While no U.S. cable MSO is allowing subscribers to access over-the-top video from providers such as Netflix (Nasdaq: NFLX), Amazon (Nasdaq: AMZN) or Apple (Nasdaq: AAPL), Chambers suggested that Cisco is talking to its service provider customers about helping them find a way to charge subscribers who want to access over-the-top video. "How do you help them charge for the over-the-top type of capabilities? How do you help them cut their support costs down? We're in discussions across the board with most of the players," Chambers said.

Cisco generated $11.26 billion in net sales during its first fiscal quarter of 2012, up 4.7 percent from the $10.75 billion it generated during the same period last year. Chambers said Cisco saw strong growth from its service provider business, which saw revenue jump 26 percent during the last year. He projected that overall sales will grow 7 to 8 percent during its fiscal second quarter of 2012 to $11.14 billion to $11.24 billion.

For more:
- see Cisco's earnings release
- and FierceTelecom's earnings coverage
- as well as the transcript from the quarterly call

Related articles:
Cisco buys BNI Video in TV Everywhere play
Comcast squeezing more favorable prices from set-top vendors
Is the set-top box on its way out? Cable executives sound off
SCTE's Mark Dzuban on cable and the connected device revolution