Meanwhile, there's an unconfirmed rumor that come this September, Cisco will lay off as many as 3,000 employees and close a profitable business unit. I'm going to go out on the limb by making the assumption that Linksys will be the profitable business unit (BU) Cisco will close.
So why am I assuming Linksys will get the ax?
Well, lets look at the 2-year (FY10/FY11) Quarterly sales performance of Linksys/Pure Digital (i.e. Virtual Home):
"During Q3 FY '11, we did recognize restructuring charges to our GAAP financial results, with a pretax impact of approximately $150 million, and this was in connection with our Consumer business. This included the announced exit of our Flip Video business and included charges related to inventory, supply chain, severance and other items... On Flip, Flip was in the results for part of the quarter, but it's out for next quarter."
Interestingly, Cisco reorganized its product sales reporting categories during Q1'FY12:
Alarmingly, Cisco's Nine-Month FY12 "Other Sales" (which includes Linksys) of $792 million are down -$432 million (i.e. -35.29%) from FY10 sales of $1,224 million and down -$246 million (i.e. -23.69%) from FY11 sales of $1,038 million.
It's because of the declining Nine-Month FY12 "Other" (which includes Linksys) sales results that I believe Linksys will be the profitable business unit (BU) Cisco will close!