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Cisco's Cable Sales Fall Hard

Cisco Systems sales to North American cable operators fell 35%
year-over-year in the quarter ended Oct. 30, 2010, with the networking
giant blaming the drop on lower spending by MSOs on set-top boxes as
well as competition from lower-cost competitors.

Cisco chairman
and CEO John Chambers, on a conference call with analysts Wednesday,
said orders to U.S. telcos including AT&T and Verizon grew 20% in
the quarter.

Cable sales, by contrast, were down significantly.
Specifically, Cisco's traditional set-top business -- which represents
$2 billion in annual sales -- fell 40% among North American cable
operators in the period. About half of the company's set-top orders in
the quarter were from North American MSOs.

Cisco's cable business
"is under pressure as new housing and consumer spending slows, as
lower-cost competitors begin to enter the market," Chambers told
analysts. "As a result, we are seeing year-over-year declines in orders
and we expect to see continued pressure, specifically in our traditional
North American cable business."

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