Cisco Makes Consumer Play with Moto Acquisition

Cisco Systems is buying Moto Development Group, a small company that helps vendors design consumer-based electronic devices, such as Cisco's Flip video camera. Cisco is looking to Moto to boost its product road map for the consumer space, one of 30 markets that Cisco is targeting.

Cisco Systems is continuing its push into the consumer space with the acquisition of Moto Development Group, a privately held company with a history of helping create consumer devices, including Cisco's Flip video camera.

Cisco officials said Moto's 35-member team will complement Cisco's own consumer business and enhance its product road map. The consumer space is one of 30 markets that Cisco has targeted for expansion.

Financial terms of the deal, which was announced May 18, were not disclosed.

Cisco already makes a host of consumer products, from the Flip to the Valet home wireless hot spot and Linksys router.

"Moto's design and engineering teams have deep consumer expertise that will accelerate our ability to continue to deliver great products and expand Cisco's consumer business," Jonathan Kaplan, senior vice president and general manager of Cisco's Consumer Products group, said in a statement.

Moto's customers run the gamut, from Microsoft and Pure Digital (the Flip creator that Cisco bought in 2009) to Sirrus, Twenty20 and Virgin Pulse.

Brian White, an analyst for Ticonderoga Securities, said the acquisition is a smart one for Cisco, which wants to become a larger player in the consumer electronics space.

"Cisco is provided with more innovative tools to pursue the consumer market, which is one of the company's longer-term growth drivers," White said in a report May 18.

Ticonderoga, quoting figures from the Consumer Electronics Association, said the consumer electronics space is about a $681 billion market in 2010, though Cisco in 2009 said its addressable market was $4.9 billion.

Like counterparts at other tech vendors, Cisco officials view the consumer space as one where users' lifestyles will continue to revolve around their electronic devices, and where users will demand greater connectivity from any device in any location.