Cisco 2010 Annual Report Download - page 23

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Advanced Technologies
Fiscal 2010 Compared with Fiscal 2009
• Sales of unified communications products increased by $294 million, primarily due to increased sales of IP phones and
associated software, and higher sales of our web-based collaboration offerings.
• Sales of security products increased by $195 million. Our increased sales of security products were a result of increased sales of
our web and email security products as well as our security appliance products, each of which integrates multiple technologies
(including virtual private network (VPN), firewall, and intrusion prevention services) on one platform, partially offset by lower sales
of module and line-cards related to our routers and LAN switches.
• Sales of wireless LAN products increased by $169 million, primarily due to the customer adoption of and migration to the Cisco
Unified Wireless Network architecture.
• Sales of storage area networking products increased by $67 million, primarily due to higher sales of our Cisco MDS 9000 product
line.
• Sales of application networking services decreased by $16 million, primarily due to lower customer demand for our data center
application optimization solutions.
• Sales of video systems decreased by $57 million, primarily attributable to lower sales for digital set-top boxes.
• Sales of networked home products decreased by $106 million, primarily due to lower sales of routers and adapters.
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 $65 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.
• Sales of networked home products decreased by approximately $140 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 $50 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.
Other Product Revenue
Fiscal 2010 Compared with Fiscal 2009
The increase in other product revenue in fiscal 2010 compared with fiscal 2009 was primarily due to the following: increased sales
of Flip Video cameras of $317 million from our Pure Digital acquisition in the fourth quarter of fiscal 2009; increased sales of Cisco
TelePresence systems products of $263 million, in large part from our acquisition of Tandberg in the third quarter of fiscal 2010;
increased sales of cable products of $247 million; and increased sales of Cisco Unified Computing System products of
approximately $181 million.
Fiscal 2009 Compared with Fiscal 2008
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.
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