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Cisco Systems Inc. , the world's largest supplier of networking gear, is taking its most direct step yet into the consumer market with a deal to buy the company behind the best-selling Flip Video camera.

The Silicon Valley giant said it will pay $590-million (U.S.) in stock for privately held Pure Digital Technologies Inc. in the belief that video is about to become the next ubiquitous consumer technology.

Cisco has been moving gradually into the consumer electronics market after making its fortune selling routers and switches to companies. More than five years ago, it purchased home wireless firm Linksys Group Inc., and then spent nearly $7-billion to acquire set-top box supplier Scientific-Atlanta Inc.

“Our strategy in the consumer space is about an evolution of what's taking place in the home,” said Charles Carmel, Cisco's vice-president of corporate development and consumer.

The trend beginning in 2003 was to link home computers to high-speed wireless connections. Today the progression is about linking numerous media devices to the home network, and video is about to become a big part of the experience, Mr. Carmel said in an interview.

By expanding into the consumer world, Cisco wants to make its core technology – switchers, routers and network software – the central platform for digital media, similar to the way Microsoft made its Windows operating system the foundation for personal computers.

Cisco hopes that owning an end-to-end package from the network to the living room will give it the leverage to form lucrative partnerships with service providers, media firms and other players in consumer electronics.

Pure Digital “gives us instant leadership and positions us for what we think is the next wave of the home: Visual networking, where video becomes an essential part of the overall consumer experience, from communication with video, to entertainment and capturing and sharing,” Mr. Carmel said.

Pure Digital has sold more than two million Flip Videos since launching the pocket-sized device less than two years ago. It has been embraced by U.S. consumers for its simplicity and low price. The device plugs into a computer's USB port for transferring video, and includes software for organizing and sharing files. It sells for between $99 and $229. Only some models are available in Canada.

Analysts say Cisco's growing consumer division contains quality pieces, including social networking technology, but they question whether the company can compete effectively against giant brands such as Sony Corp. and Apple Inc.

Mr. Carmel says Cisco is not focused on simply selling products, but on changing the way consumers use the underlying technology. For example, the company plans to create a Flip Video camera that will connect directly to the Internet without a computer.

“Our acquisition strategy is all about identifying market transitions and the key players that are creating the disruptions. We look at Pure Digital as a perfect example of a disrupter that is capturing one of those major market transitions,” Mr. Carmel said.

Cisco plans to use Pure Digital's technology to help it roll out a version of its high-end video conferencing product, called Telepresence, for the home in the next couple of years.

“Pure Digital will add to Cisco's arsenal of products aimed at driving increased network bandwidth, similar to Cisco's video conferencing products. As more consumers upload video content to the Web, it will also drive demand for Cisco's traditional products – switches and routers,” Nikos Theodosopoulos, an analyst with UBS Securities LLC, wrote in a report.