Cisco: 'We love set-top boxes'; dismisses speculation that it will sell Scientific-Atlanta unit

Cisco (Nasdaq: CSCO) dismissed a report in Sunday's New York Post that it is looking to sell the set-top box business that it acquired from Scientific-Atlanta. "We are committed to the market. Therefore we will continue to be in the market," Cisco director of corporate communications John Earnhardt told FierceCable when asked if Cisco was looking to exit the set-top business.

Earnhardt

Cisco became one of the biggest suppliers of high-definition set-tops, DVRs and other cable hardware through its $6.9 billion acquisition of Scientific-Atlanta in 2006. It has seen demand from cable customers recently for its Videoscape platform, which allows service providers to deliver IP video to subscribers from cloud-based servers.

Last July, Cisco announced that it would cut about 6,900 employees, and sell a set-top manufacturing facility in Juarez, Mexico to Taiwan-based Foxconn (Taiwan: 2354.TW). Cisco had picked up the plant through its acquisition of S-A.

Some industry observers have questioned whether Cisco could look to exit the set-top business, following the deal to outsource its set-top manufacturing operations in Mexico to Foxconn. Citing an anonymous source, the New York Post said Cisco was looking to sell the set-top division.

"Every few months there seems to be a rumor or speculative comment about our commitment to our set top box business. Let me be as clear as I can: we love set top boxes," Earnhardt wrote in a blog post on Monday. Earnhardt also pointed to remarks about the set-top business that Cisco CEO John Chambers made on the company's fourth-quarter earnings call. "In terms of set top boxes, we are very much committed to this marketplace," Chambers said on the call.

While Cisco says that it is committed to the set-top business, its Foxconn deal shows that the company prefers to outsource the manufacturing of set-tops. Foxconn has drawn scrutiny in recent weeks from numerous reports about conditions at its factories in China, which manufacture products for Apple (Nasdaq: AAPL) and other consumer electronics companies. Cisco officials didn't respond to questions about how reports about Foxconn factory conditions could impact its relationship with the company.

For more:
- see Cisco's blog post
- the New York Post has this story

Related articles:
Analyst: Cisco shedding STB business would be detrimental
Cisco trips workforce by 9%; sells set-top box factory in Mexico to Foxconn
Cisco sees increased demand for Videoscape platform