Telecom Lead Asia: Huawei’s challenging offerings for enterprises in the US and other markets did not affect Cisco as it clocked 6 percent increase in sales to $11.9 billion and 18 percent increase in profit to $2.1 billion in first quarter.
However, Cisco’s main worry is about Europe. Cisco’s main growth is due to US businesses. It expects better sales from government.
Cisco CEO John Chambers said: “Cisco is at the center of the major market transitions — cloud, mobility, video — and yet we believe the largest market transition lies ahead of us, as the Internet of Everything becomes a reality.”
Chambers said the Internet of Everything will create unprecedented possibilities for businesses, individuals and countries, and Cisco is poised to lead and fully maximize the opportunities of this evolution.
Huawei’s presence in the U.S. market had created tremendous pressure on Cisco’s revenue streams. Considering the growth in revenue and profit, Cisco is free from the Chinese competition for the time being.
Nytimes.com said Cisco has been under assault from Huawei in the developing world and HP for its European and American customers. By consolidating much of its manufacturing and offering big-ticket networking systems, Cisco’s gross margins for the quarter rose to 62.7 percent from 62.4 percent a year ago.
Cisco said its security business grew 6 percent, networking income increased 38 percent, data center sales jumped 61 percent.
However, its core business – switching and routing – declined 2 percent year-over-year.
Its collaboration business including unified communications (UC) and Telepresence declined 8 percent in the quarter.
NDS enabled Cisco to clock in video business. Cisco’s sales of products for the wireless and data center market boomed, thanks to mobile devices and cloud computing.