Silicon Valley electronics firm Cisco Systems, Inc. has reported that its current quarter revenue will probably fall below expectations due to limited corporate spending. The manufacturer is one of the largest in California’s Silicon Valley tech and engineering region, and has been a favourite of large companies since it began operations in the early 1980s.
Cisco specialises in networking equipment, primarily routers, phones, and data centre equipment for enterprises and large businesses. The company has grown into one of the largest suppliers of phones and other basic office networking products over the last decade, gaining a presence in many of the largest companies in the United States due to savvy partnerships and bulk pricing deals.
It’s also a frequent sight in homes, with the company’s digital routers forming a major part of the home internet sector. Cisco has made a name for itself by providing premium network equipment for home users and small businesses, gaining loyal market share through reliability. With the poor state of small businesses taking its toll on other B2B companies, Cisco’s revenues are hurting.
The company’s most recent sales estimates have reached $10.83 billion, significantly below their planned figures of approximately $10.95 billion this quarter. While the difference may seem small to those outside of the business-to-business networking equipment industry, the drop in demand reflects a severe hit to Cisco’s bottom line, particularly given the company’s potential for growth.
Manufacturers of business computer equipment typically experience a downturn in business when other companies are struggling, largely due to the expense associated with updating hardware and networking equipment. Cisco’s share price dropped after the announcement, although tech industry observers predict that it will pick up as the company plans to expand into over 30 new markets.