Quartz reports: Cisco announced two important things in today’s earnings report: The first is that the company is aggressively moving into the Internet of Things — the effort to connect just about every object on earth to the internet — by rolling out new technologies. The second is that Cisco has seen a huge drop-off in demand for its hardware in emerging markets, which the company blames on fears about the NSA using American hardware to spy on the rest of the world.
Cisco chief executive John Chambers said on the company’s earnings call that he believes other American technology companies will be similarly affected. Cisco saw orders in Brazil drop 25% and Russia drop 30%. Both Brazil and Russia have expressed official outrage over NSA spying and have announced plans to curb the NSA’s reach.
Analysts had expected Cisco’s business in emerging markets to increase 6%, but instead it dropped 12%, sending shares of Cisco plunging 10% in after-hours trading. [Continue reading…]
If Cisco currently feels like its operations have been undermined by the NSA, it hasn’t shown much reticence in the past about making its technology available where it would likely be used for surveillance.
In 2011, the Wall Street Journal reported: Western companies including Cisco Systems Inc. are poised to help build an ambitious new surveillance project in China—a citywide network of as many as 500,000 cameras that officials say will prevent crime but that human-rights advocates warn could target political dissent.
The system, being built in the city of Chongqing over the next two to three years, is among the largest and most sophisticated video-surveillance projects of its kind in China, and perhaps the world. Dubbed “Peaceful Chongqing,” it is planned to cover a half-million intersections, neighborhoods and parks over nearly 400 square miles, an area more than 25% larger than New York City.
The project sheds light on how Western tech companies sell their wares in China, the Middle East and other places where there is potential for the gear to be used for political purposes and not just safety. The products range from Internet-censoring software to sophisticated networking gear. China in particular has drawn criticism for treating political dissent as a crime and has a track record of using technology to suppress it.
An examination of the Peaceful Chongqing project by The Wall Street Journal shows Cisco is expected to supply networking equipment that is essential to operating large and complicated surveillance systems, according to people familiar with the deal.