Cisco on Thursday agreed to acquire Pure Digital Technologies, a privately held maker of consumer video devices such as camcorders, for $590 million.

San Francisco-based Pure Digital could cost $605 million because Cisco said it set aside another $15 million for employee retention incentives.

The deal appears to be a departure for San Jose-based Cisco, which in recent years seemed to favor the purchase of application software companies who market products that drive network traffic. (Cisco Takes Five Across)

Cisco’s last big-bucks acquisition of a consumer products company dates back six years when it acquired wireless networking firm Linksys.

The $500 million Linksys acquisition marked the router company’s earliest flirtation with the so-called digital home market.  (Cisco Bets on Home Networks)

Still Pure Digital, which makes relatively inexpensive, user-friendly camcorders, seems like a stretch for Cisco particularly at a price tag of $600 million.

“This is about Cisco expanding its horizon into the consumer space. They want to be part of the digital home of the future,” said Nathan Safran, an analyst with Forrester Research.

But it is difficult to understand what Cisco, which has made the bulk its money from high-margin network products, gains from an outright purchase of a consumer hardware company as opposed to a partnership.

“Cisco may want a role in impacting how the consumer video space evolves and to tie it closely to what it is doing in other aspects of the digital home,” Mr. Safran said.

Pure Digital’s camcorders, which include web-friendly software and USB connections, are aimed directly at the YouTube video crowd–a constituency that drives bandwidth-hungry Internet video traffic.

The company, which has raised about $70 million in funding, reportedly leads the U.S. camcorder market with a 20 percent share, placing it ahead of much larger players such as Sony.

Pure Digital is backed by Sequoia Capital, Steamboat Ventures, and Benchmark Capital, among others.