Cisco to Discontinue Slow-Selling Router

Cisco Systems Inc., the No. 1 maker of gear that helps to power the Internet, said slow sales of an optical router has prompted it to discontinue making that device found at the core of optical networks.

Cisco said it will stop making the 15900 Wavelength Router, a product that came out of its acquisition of Monterey Networks in August 1999. “Suffice it to say, we thought the market would mature much faster than it has,” said Carl Russo, group vice president of optical networking. “Given the current market conditions, we’re going to focus our resources on things that are driving revenue for us.”

Specifically, Cisco plans to redeploy the engineering talent working on the 15900 Wavelength Router into the metropolitan optical market, which has been growing faster than the core of optical networks. Cisco’s acquisition of Cerent Corp. in August 1999 gave the company products sold into the metropolitan market. Rivals in the market for the discontinued product include Ciena Corp., Lucent Technologies Inc., Nortel Networks Corp. and a handful of start-ups.

Cisco, known for its blistering sales growth and ravenous appetite for buying companies, has also been hit by the slowdown in the U.S. economy. It has announced layoffs and warned that its third-quarter sales will fall about 5% from the second quarter, a first for Cisco since it went public in 1991.

Cisco shares fell 6 cents to close at $13.69 on Nasdaq. They have dropped 64% this year. The company’s market value closed below $100 billion Wednesday for the first time since 1998.