Cisco 2009 Annual Report Download - page 22

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Management’s Discussion and Analysis of Financial Condition and Results of Operations
Advanced Technologies
Fiscal 2009 Compared with Fiscal 2008
• Sales of unified communications products increased by approximately $30 million, primarily due to increased adoption of our
web-based collaborative applications and related conferencing media, partially offset by lower sales of IP phones and associated
software.
• Sales of video systems were relatively flat for fiscal 2009 compared with fiscal 2008, as the increased sales of IP set-top boxes and other
video products was offset by lower sales of HD-DVR cable set-top boxes.
• Sales of security products decreased by approximately $70 million. Our decreased sales of security products were a result of the lower
sales of module and line-cards related to our routers and LAN switches, partially offset by increased sales of our web and email security
products and security appliance products which integrate multiple technologies (including virtual private network (VPN), firewall, and
intrusion prevention services) on one platform.
• Sales of networked home products decreased by approximately $115 million. The decrease in sales of networked home products was
primarily due to lower sales of wireless routers for the connected home, cable modems, and adapters.
• Sales of storage area networking products decreased by approximately $85 million, which was primarily due to lower sales of our MDS
9000 product line.
• Sales of wireless LAN products decreased by approximately $55 million.
• Sales of application networking services decreased by approximately $40 million. The decrease was primarily related to lower customer
demand in fiscal 2009 for data center application optimization solutions.
Fiscal 2008 Compared with Fiscal 2007
• Sales of unified communications increased by approximately $845 million, in part due to the contribution of sales from WebEx, which we
acquired during the fourth quarter of fiscal 2007. There was also an increase in sales of IP phones and associated messaging,
conferencing and contact center software as our customers continued to transition from an analog-based to an IP-based infrastructure.
• Sales of video systems products increased by approximately $355 million. The increase was attributable to several factors, including an
increase in the sales of high-definition (HD) and IP set-top boxes, network upgrades and international growth.
• Sales of security products increased by approximately $205 million, primarily due to revenue from IronPort Systems, Inc., which we
acquired during the fourth quarter of fiscal 2007, revenue from module and line card sales related to our routers and LAN switches, and
revenue from our next-generation adaptive security appliance products.
• Sales of application networking services increased by approximately $125 million. The increase was primarily due to higher demand
from customers for wide-area network (WAN) optimization solutions.
• Sales of wireless LAN and storage area networking products increased by approximately $85 million and $45 million, respectively. Sales
of networked home products decreased by approximately $20 million.
Other Product Revenue
The decrease in other product revenue in fiscal 2009 compared with fiscal 2008 was primarily due to the decline in sales of our cable,
optical, and service provider voice products, partially offset by increased sales of emerging technology products such as Cisco
TelePresence systems.
The increase in other product revenue in fiscal 2008 compared with fiscal 2007 was primarily due to an increase in sales of cable
products, Cisco TelePresence systems and other emerging technology products.
20 Cisco Systems, Inc.