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UPDATE 1-Cisco CEO vows to double-down on video

Published 04/07/2011, 11:37 AM
Updated 04/07/2011, 11:40 AM
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* Chambers: need to take bold steps and tough decisions

* Doubling bet on video

SAN FRANCISCO, April 7 (Reuters) - Cisco Inc CEO John Chambers, days after admitting the company he has led for 16 years had lost its way, acknowledged challenges remain in its core business of networking while vowing to "double down" on video.

Chambers told analysts and investors at a Wells Fargo technology conference on Thursday that the routing business was "in very good shape" but he faced "challenges" in the other pillar of its core business, switching.

Its video-focused products include "Telepresence" video-conferencing, software and hardware.

In a remarkably candid memo to employees earlier this week, the respected Silicon Valley chieftain admitted the one-time technology bellwether and Wall Street darling will need to take bold steps to restore its tarnished credibility. He confessed the networking giant had been slow to make decisions, fallen down on execution and lacked discipline in an aggressive expansion.

Chambers warned staff to prepare for a number of unspecified changes in the next few weeks and coming fiscal year, starting in August. [ID:nN05159515]

Chambers reiterated on Thursday that tough decisions needed to be taken. Executives have kept quiet on what was planned, but analysts speculate Cisco may be forced to whittle down a largely unspectacular consumer-oriented business -- from Flip cameras to its Umi home conferencing product -- while refocusing on its core Internet routing and switching business. (Reporting by Paul Thomasch in New York; Editing by Tim Dobbyn)

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