NSA leaks blamed for Cisco’s falling sales overseas

Ars Technica: Cisco executives recently announced declines in product orders in China, and have placed at least part of the blame on the National Security Agency.

“In our Q1 earnings call of November 13th, we stated that product orders in China declined 18% in Q1 FY14, whereas in Q4 FY13, we referenced that our business in China had declined 6%,” a Cisco spokesperson told Ars. “By comparison, China bookings were up 8% in Q3 FY13. So, yes, there is a short-term trend of declining business in China, which we have acknowledged.”

Cisco noted that overall revenue is growing. “From a topline perspective, total revenues grew 2% $12.1B for the first quarter. Cisco revenues also grew at 6% in the preceding quarter, and grew 5% in the quarter ending April 2013,” the company said.

The trend in China is a little worrying, though. When former NSA contractor Edward Snowden revealed documents that showed the NSA had infiltrated the network infrastructure of universities and other institutions in China, suspicion was immediately cast upon Cisco. In an article published on June 20, the Chinese English-language newspaper Global Times stated, “Although the company has issued statements saying that it is not involved in monitoring citizens or government communications in China or anywhere else, recent events mean that it may be quite a long time before we can trust Cisco again.”

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