Kit maker to create new business segment to cover Greater China; Owen Chan to head new unit.
Network equipment maker Cisco Systems Inc. will restructure its Asia-Pacific and Japan operations and create a new segment focused on Greater China, a move that reflects the growing importance of that market's potential for equipment vendors seeking to grow in an increasingly competitive market.
As part of the move, the San Jose, Calif.-based company said it will now have three "theaters", or segments, that will allow the company to have a more focused strategy and investment of resources. Greater China, Hong Kong and Taiwan previously operated under the Asia-Pacific region.
The change is effective from February.
"Given the size and growth of the Chinese economy and our significant commitments to our China business, we believe designating Greater China as its own theater marks an important next step in our strategy," said Robert Lloyd, Cisco's executive vice president, worldwide operations, in a statement."Cisco will be able to maximize these opportunities by providing increased focus on our customer and partner relationships in the region."
The company's Greater China region will be led by Owen Chan, who joined Cisco in 1999 and has been president of Cisco's Asia-Pacific region for the past five years. Edzard Overbeek will lead the Asia-Pacific and Japan regions, it said in a statement late Monday.
Cisco said Japan, Greater China and the Asia-Pacific region comprise about 15% of the company's worldwide revenue. For the fiscal first quarter ended Oct. 24, Cisco reported sales of $9 billion, down 12.7% from $10.3 billion a year earlier. Cash and cash equivalents and investments amounted to $35.4 billion at the end of the first quarter of fiscal 2010, compared with $35.0 billion at the end of fiscal 2009.
Analysts said the move makes sense for Cisco, which already has a big presence in mainland China, but is also seeing increasing competition from the likes of local vendors Huawei Technologies and ZTE Corp.
"This move is to really focus more on China," said Charles Guo, an analyst at JPMorgan in Hong Kong."We know that China is growing fast...a lot of global companies see China as a big potential and need to have a special emphasis."
Still, Guo noted that Cisco and ...
