Linksys founder awaits the $500 million punchline

Founder of Linksys, Victor Tsao, is still waiting for someone to jump out from behind a curtain and scream "April Fool!", following the company's 2003 acquisition by Cisco Systems for US$500 million in stock and its dominant position in US retail store sales.

Founder of Linksys, Victor Tsao, is still waiting for someone to jump out from behind a curtain and scream "April Fool!", following the company's 2003 acquisition by Cisco Systems for US$500 million in stock and its dominant position in US retail store sales.

Established in 1988, Linksys produces a variety of wireless solutions, including LAN equipment, broadband routers and network adapters for home and small business users, with a new line of releases due for sale on the Australian market in June/July of this year.

Linksys announced its new line of "speed-enhanced 802.11g" products last week, claiming the products enhance wireless network performance by up to 35 percent.

Included in the new line is an ADSL 802.11g network router, with a 4-port Ethernet 10/100 switch and a wireless G access point to connect up to 32 devices throughout the home with speeds of 54Mbits/s.

"This is a very traditional Linksys product," said Tsao. "About 5 to 6 years ago Linksys was the first to introduce a broadband router, and this one allows up to four users for a price of less than US$200 and its easy to use; now we're first ones to bring out a G standard wireless."

Tsao explains that the company's initial line of products targeted small business users. However, it has greatly expanded on its consumer line in the last decade.

"In the last ten years we've had a lot of experience in consumer networking, so we began blending that kind of information into products that are easy to use and affordable and good quality and have support," said Tsao.

Linksys has also introduced a so-called "wireless-B media link" as part of its new wireless home product range, which it claims bridges the gap between analogue and digital applications by allowing users to listen digital audio content from a PC on a home stereo "without running cables through the house".

Other products include wireless gaming adapters to allow players to connect consoles for head-to-head gaming and to the Internet for online multi-player functions. However, Tsao says 75 percent of Linksys products sold in Australia are from the company's SME range.

Linksys released 54 new products in 2003, bringing its overall tally to 250.

"From data networking to VoIP there tremendous opportunity for wireless applications to be introduced to the market, making it a multi billion dollar market. We see that already," said Tsao.

According to Tsao, Linksys has experienced a marked increase in sales over the past year escalating from 2.8 million units of wireless products shipped out in 2002, to over 7 million last year.

Tsao says that Linksys expects to ship out over 10 million units this year, giving credit to benefits the company has received care of the Cisco acquisition.

"Since the merge with cisco we have seen tremendous benefits in three areas, " said Tsao, stating that the benefits include Cisco's worldwide distribution infrastructure, which has allowed the company to gain global market status.

"Cisco is a company that uses Linksys products as part of production portfolio, we're providing cisco with an end-to end solution," said Tsao; adding that another benefit of being affiliated with the company is that "it holds a lot of licenses and intellectual property".

Tsao says the future of Linksys looks very good, predicting that by next year the company will "hopefully be a billion dollar organisation".