[joakleaf]

But surely the overlap between the people who used to work on routers and the people working on services must be minimal.

However, maybe some of the hardware guys who used to work on the router are now busy with the watch. It would make sense that they would sacrifice the routers in favor of the watch (although I would prefer the routers).

[djf1]

Generally yes, but another quote from the call: "We are making important investments in data centers because we want to support our services business." Maybe that's taken some of their hardware resources.