Cisco Aims at China Market With Restructuring

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Cisco Systems is adding a China business unit to its Asia division, the company said late Monday, highlighting the strength of the Chinese market and Cisco's efforts to grow in the country.

China, Hong Kong and Taiwan will fall under the company's new Greater China unit starting next month, Cisco said. Japan will retain its own unit and the rest of the Asia-Pacific region will remain a joint unit.

Cisco's market share is lower in China than in almost any other country, and the company is likely looking to change that, said Naresh Singh, a principal analyst at Gartner. Investment in IT by the government and by state-owned enterprises is set to continue fueling China's market for networking equipment, Singh said.

"China is a major opportunity," he said.

Cisco took 49 percent of China's market for enterprise Ethernet switches in 2008, according to Gartner. "In the rest of the world it's ... usually 70 percent and above," said Singh.

Cisco competes in China against local network gear makers Huawei Technologies and ZTE, as well as against H3C, which is owned by 3Com.

Cisco late last year said it would acquire the set-top box business of DVN Holdings, a Hong Kong-based company with major operations in mainland China.

Cisco's three Asia business units account for about 15 percent of its global revenue, it said. The restructuring is meant to support its investment and growth plans in the region, it said.

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