Analysis: Some Cisco investors urge an exit from set-top box unit

Cisco Systems Inc Chief Executive John Chambers is facing growing pressure from investors to exit its television set-top box business, where revenue has been plummeting and profit margins trail the rest of the company. The problem is that there are few obvious buyers for the unit – the former Scientific Atlanta that Cisco bought for $6.9 billion in 2005 – so Chambers might have no choice but to close the business, analysts said. Cisco stunned the market on November 13 by warning that revenue would fall as much as 10 percent this quarter and keep declining for several quarters. It blamed everything from emerging economy weakness and political backlash in China to company-specific problems, such as market share losses in network equipment and declining sales in set-top boxes.


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