Cisco buys SignalWorks – and soon its own shares

Stereo sound for IP phones

Cisco Systems today announced a deal to acquire IP telephony software firm SignalWorks in exchange for $13.5 million of Cisco stock.

The router king also said today it plans to buy back $5 billion of its shares.

Ciscos's acquisition of SignalWorks, which has been approved by the boards of both companies, is expected to close by the fourth quarter of Cisco's Fiscal Year 2003. SignalWorks' employees will join Cisco's Voice Technology Group.

Privately-held, Mountain View, California-based SignalWorks develops digital signal processing software technology designed to improve the quality of IP telephony systems.

SignalWorks' Acoustic Echo Canceller (AEC) software, which improves voice clarity on IP Telephony links, will be rolled into Cisco's line of IP phones and IP softphones.

Already deployed in Cisco IP phones in use by some large companies, SignalWorks' AEC software delivers "advanced audio features, such as multiple microphone capabilities, stereo sound, and PC-based softphones". Cisco hopes the improved audio and speakerphone capability it gains with the SignalWorks acquisition will encourage more service providers and enterprises to adopt its technology and help consolidate its position as market leader in the IP Telephony segment.

The global IP telephony market, which is expected to increase from approximately $900 million in 2002 to $4.3 billion in 2006, according to research by Synergy Research Group.

Cisco has more than 6,000 IP communications customers worldwide to whom it has shipped in excess of 1.5 million IP phones, according to the company. ®