I am not sure if this is a good thing or not. On the one hand, I would expect Sipura's quality control to improve (although Sipuras are generally high quality devices, I've heard a few reports of people getting one that is bad out of the box, or that fails in the first week or two of use -- fortunately these are always replaced promptly). On the other hand, I suspect they will not be as responsive to customer needs, nor as quick to offer firmware/feature upgrades.
But, VoIP adapters are a competitive market now. Those who remember the early days of computer modems may remember when we basically had a couple of brand choices, Hayes and U.S. Robotics. Now there are many more choices available (and does ANYONE have a Hayes modem anymore?). Same thing with VoIP adapters, we had the Cisco ATA-186 and then the Sipura. Now Cisco is buying Sipura (and has previously purchased Linksys, which already offers VoIP adapters based on Sipura technology) but today there are many other companies offering VoIP adapters, and it wouldn't surprise me if in three or four years you can pick one up in the $20-$40 range (and that's not counting the free-after-rebate or free-with-service-commitment deals that will inevitably come along). It will be interesting to see if Cisco/Linksys/Sipura retains any significant market share at that time.
There is a thread on this at BroadbandReports.com:
First Acquisition for Linksys Division; Adds Experienced Team and VoIP Technology
SAN JOSE, Calif., April 26, 2005 - Cisco Systems today announced a definitive agreement to acquire privately-held Sipura Technology, Inc. This represents Cisco's first acquisition for its Linksys division, the leading provider of wireless and networking hardware for home, Small Office/Home Office (SOHO) and small business environments. Sipura is a leader in consumer voice over internet protocol (VoIP) technology and is a key technology provider for Linksys' current line of VoIP networking devices. In addition to Sipura's valuable technology and customer relationships, their experienced team with extensive VoIP expertise will help build a foundation for Linksys' internal research and development capabilities in voice, video and other markets.
Under the terms of the agreement, Cisco will pay approximately $68 million in cash and options for Sipura. The acquisition is subject to various standard closing conditions, including applicable regulatory approvals, and is expected to close in the fourth quarter of Cisco's fiscal year 2005 ending July 30, 2005.
Consumer VoIP is rapidly expanding as independent providers and incumbent telecom and cable operators bring VoIP offerings to consumers. Synergy Research Group, a leading market research firm, reports that today there are close to 8 million home users worldwide using VoIP to make phone calls over their broadband connections. By
2009, Synergy anticipates this number to grow to 58.9 million home users using VoIP to talk to friends and family around the world using broadband and VoIP technology."VoIP is a strategic segment for innovation and growth for Cisco and Linksys. The acquisition of Sipura will augment Linksys' leading position in the rapidly growing VoIP market and is an example of Linksys' strategy to increase internal R&D capabilities in specific product categories," said Charles Giancarlo, Cisco CTO and Cisco-Linksys president. "Adding Sipura's technology reinforces our commitment to developing products in the consumer voice space."
This acquisition follows Cisco's core strategy of using acquisitions to build new technologies and speed time-to-market for its products. The Sipura acquisition accelerates Linksys' leadership in the emerging high growth VoIP consumer and SOHO markets, provides continued competitive differentiation for its VoIP product offerings, and allows Linksys to better serve it customers.
Sipura has developed the technology incorporated in leading VoIP adapters (including those integrated into home routers and gateways) and a multi-line IP phone for the consumer and SOHO market. Sipura's technology is currently used by Linksys in some VoIP products, including certain analog telephone adapters and wired and wireless routers with phone ports. Sipura currently has relationships with regional and top-tier VoIP providers. Linksys will continue to work with those service providers, as well as use its traditional retail channels to target consumers and SOHO environments with Sipura's line of VoIP products.
Upon close of the transaction, Sipura will be integrated into Cisco's Linksys division, led by Senior Vice Presidents Janie and Victor Tsao. Sipura was founded in March 2003 and is headquartered in San Jose, Calif.
About Linksys:
Founded in 1988, Linksys, a Division of Cisco Systems, Inc., is the global leader in Wireless and Ethernet networking for consumer, SOHO and small business users. Linksys is dedicated to making networking easy and affordable for its customers, offering innovative, award-winning products that seamlessly integrate with a variety of devices and applications. Linksys provides award-winning product support to its customers. For more information, visit
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