Before Linksys reached 64 countries, it began as a small data networking hardware manufacturer in California in 1988. Created by Victor and Janie Tsao, Linksys initially sold networking equipment to home users and small businesses. After many years in the industry and with an acute sense of business acumen, the Tsaos grew their company into one of the most innovative tech companies worldwide. In 2021, the brand was a CES 2021 Innovation Awards Honoree. This American networking equipment firm was also the first to ship 100 million wireless and wired routers globally.
Many people know Linksys because of its routers. However, the brand also provides other networking hardware. These include security IP cameras, storage, switches, DSL/cable gateways, and wireless access points. Like many other businesses in the networking industry, Linksys started as an independent company. In 2003, it became a subsidiary of Cisco Systems and then Belkin in 2013. From 2018 to the present, Foxconn has been the brand’s parent company.
How the Tsao’s Founded Linksys
In 1988, Victor and Janie Tsao founded DEW International. Their young company began in a garage in a cul-de-sac in Irvine, California. The company was born from the dream of becoming independent before the couple reached 40. Before becoming immigrants in the US, the Taiwanese pair met at Tamkang University in Taiwan. Both worked in information technology, with Victor at Taco Bell and Janie at Hawley Hale.
Jamie launched DEW International as an IT consultancy while Victor remained working at Taco Bell, where he had a good position. Their company worked with domestic tech vendors like Northgate Computer, providing Taiwan-manufactured products. Not long after, the Tsao’s found a deficiency in the American market: cables that connected PCs and printers that extended beyond 15 feet without degrading the data.
They also realized that the manufacturer that brought this idea to them couldn’t find American partners because they couldn’t speak the language. The Tsao’s partnered with the manufacturer and then renamed their company Linksys. Victor quit his job in 1991 and helped his wife move the firm several times until it reached a 2000-square-foot office. By this time, Linksys was selling 8,000 Multishares, products that could connect multiple computers to multiple printers. The couple’s investment reached only $7,000, and they paid it off within six months.
Linksys’ Growth and Development
Soon, the brand expanded and began distributing new products. These included PC-to-PC Ethernet hubs, cords, and cards. They also released products that let small businesses and households connect computers for data sharing. These products put the brand at the top of this niche market, leading to a $6.5 million revenue. During this time, Victor took the position of CEO, managing operations and finances, while Janie dealt with sales as the vice president of business development.
With its growing into a behemoth of a company, it’s no wonder the firm got its big break in 1995. During that year, Microsoft released Windows 95, which offered many networking functions. This opened the market for Linksys as it specialized in network hardware. Janie Tsao saw this opportunity and grabbed it firmly. She opened their distribution to Fry’s Electronics stores, earning the brand up to $10.7 million.
A trade show called RetailVision was held in 1996, which Janie Tsao attended. She wanted to market her products to Best Buy but couldn’t find the right opportunity to get a meeting with the distributor’s buyer, Wayne Inouye. She made the conference happen when she tracked Inouye to his hotel room and presented her products. The Best Buy buyer ordered gear worth less than $2 million, which led to immense success in the following years.
Linksys’ revenue went up to $21.5 million in 1996, $32.1 million in 1997, and $65.6 million in 1998. The company moved from its 2000-square-foot office to a 20,000-square-foot location. Despite its success, the couple remained strict with their spending.
Gearing up for More Popularity and Success
The late 90s brought about home broadband Internet, leading to another big opportunity. Cisco was Linksys’ biggest competitor as it already had a router and cord splitter that let several PCs connect to one modem. However, this product cost $500 or more and was too complex for most home users. These home users wanted something simple and cheaper, and the Tsaos’ networking firm provided just that.
Their multiport router cost only $199 and used a browser-like program that facilitated the installation. Before the turn of the century, the company’s share of the networking market jumped from 10.8% to 18.6%. Its popularity also meant that the brand was the leading hardware provider in the home networking industry.
Wireless networking followed and became the fad in 2001, thanks to the release of Wi-Fi or the 802.11b wireless transmission standard. Linksys released a system of computer cards and wireless routers. Because of its popularity, it became the go-to Wi-Fi router brand for many consumers. Growth was consistent; by 2005, the firm owned 49% of the networking market.
Becoming a Subsidiary of Various Companies
In 2003, Cisco Systems, Inc. made a deal to buy Linksys for $500 million. Cisco kept the brand name and will operate it as an autonomous division of the company. The newly acquired networking business will also have access to Cisco’s sales infrastructure and service provider channel. The main reason for the sale was Cisco’s reentry into the home and consumer networking market.
The partnership further expanded the company’s product line. Later, the Linksys Voice System and Business Series brands were released.
This acquisition only lasted ten years. In 2013, Cisco needed to return to its core enterprise networking roots and away from the consumer industry. Thus, it sold the Linksys division to Belkin for an undisclosed sum, giving the latter 30% of the home router market.
The company gained a new parent company when Foxconn bought Belkin and its subsidiaries, Linksys and Wemo, in 2018 for $866 million.
Scandals Linked with the Networking Company
FSF Suit on Copyright Violations
In 2008, the Free Software Foundation (FSF) filed a copyright infringement lawsuit against Cisco. The lawsuit states that some Linksys products sold under Cisco violated the licenses of several programs over which the FSF has copyright. These programs include GCC, the GNU C Library, and Binutils. These programs have permits under the GNU General Public License (GPL) and the GNU Lesser General Public License (LGPL).
The licenses encourage tech companies to modify the software as they see fit and distribute it to others under certain conditions. One condition says that redistributors must provide the program’s source code to the recipients. The FSF found that Cisco shared licensed software without providing the corresponding source code.
Cisco insisted that they complied with the open-source software obligations and responsibilities.
Data Leaks through Smart Wi-Fi Routers
In 2019, Bad Packet, a security research site, believed that 25,000 Smart Wi-Fi routers were vulnerable to remote exploitations, which can lead to sensitive data leaks. The security site used honeypots and learned that many products allowed unauthenticated, remote access to sensitive information.
Its scans showed that over 25,000 routers leaked MAC addresses, device names, OS types, WAN settings, firewall status, DDNS configurations, and firmware update settings. These pieces of information could unmask the identity of a consumer and geolocate them via the router’s public IP address.
The company responded by testing the flagged router models with the latest publicly available firmware. It then stated that they couldn’t reproduce the same results Bad Packet found and concluded that remote attackers couldn’t get sensitive data through the mentioned technique.
How Linksys Adapted During the Pandemic
Despite launching several products during the pandemic, Linksys also suffered some setbacks during that time. Like all other tech companies, its revenue decreased during the beginning and height of the pandemic. We also couldn’t find more information about how the firm reacted to the situation by way of safety and health practice.
What Linksys Offers Today
The many products provided by Linksys include Wi-Fi routers, home mesh Wi-Fi systems, wireless access points, business network switches, home network switches, and range extenders. The brand’s services provide connectivity solutions for the home, business, and enterprise.
Linksys continues to provide products that adapt well to the challenges of the current times, such as the changes during the pandemic. It still creates and innovates products to bridge connectivity and offer convenience to its consumers.