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Meet Cisco, the consumer company

April 24, 2009

Serving two masters

The second logical step could prove more difficult. Cisco's customers will want to use their cable boxes to bring video stored on a home server or streamed from the Internet to their TVs.

In the U.S., at least, nearly all of those boxes from Scientific-Atlanta and its only significant rival, Motorola, are owned and controlled by cable or phone companies, which aren't eager to expose their video services to Internet competition.

Hooper says Cisco plans to add new features only in close cooperation with the cable operators that buy its boxes.

I think the company will run into problems trying to serve two masters, consumers and the cable providers. Their interests are diverging. And to the extent that Cisco tries to keep the Time Warner Cables and AT&Ts happy, it could jeopardize the advantage it derives from those set-top boxes.

All of this presents an opening for Microsoft or for consumer electronics makers, such as Samsung, LG, and others, that are bundling some Internet and movie services with their new televisions.

Cisco may be in a better position than anyone else to cash in on the home networking trend, but it must find a way to make its ties to the cable business a blessing, not a curse.

Stephen H Wildstrom is Technology & You columnist for BusinessWeek.

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