Cisco is not about to just bow down to Huawei and ZTE--the two dominant Asia-Pacific vendors--so it has decided to restructure its Asia Pacific and Japan operations to support investments and growth plans in the region.
Next month Cisco will establish "three theaters" that will facilitate a more focused strategy and investments to target opportunities in the region. Under Cisco's new Asia Pacific plan, China P.R.C., Hong Kong and Taiwan will become a separate Greater China Theater, while remaining Asia Pacific countries will form the Asia Pacific Theater and Cisco's Japanese operations will continue to remain a separate segment.
But for as much as Cisco's move illustrates its interest in making a stronger presence in Asia Pacific, analysts are quick to point out that they won't make much of a dent in Huawei's or ZTE's dominant positions.
"Cisco has been selling in China for a number of years. This move is to really focus more on China," said Hong Kong-based JPMorgan analyst Charles Guo in a Reuters article.
A recent illustration of Cisco's seriousness of getting a bigger piece of the Chinese telecom market came in November when it announced that it was acquiring the set-top box business of Hong Kong-based DVN (Holdings).
Leading up the China effort will be Owen Chan, who becomes President and CEO, Greater China, reporting to Robert Lloyd, Executive Vice President, for Cisco's Worldwide Operations under the new strategy.