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Technology Stocks : CSCO - Cisco Systems
CSCO 73.87-0.1%Jan 9 9:30 AM EST
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To: Marie Thorsson who wrote (18)12/11/1996 11:48:00 AM
From: Greg Jung   of 69
 
Re: margins as they apply to Cisco .vs. 3com.

I think the fear of downward pressures on margins is the main
reason Cisco has lagged (Price/sales about 8) in price while
3Com (lower recent margins, Sales/share about 2x of Cisco)
has soared.
When time lapses the high end becomes the humdrum and you have to
go with the lower margins. Since 3com has the experience in the
commodity items and has achieved dominance in some, whereas Cisco
may be percieved as being hooked on the high-tag sales.
If you've ever seen the phrase, "difficult transition from
high- to low- margin business model", its usually in a negative
context. Not to be negative myself, I'm still rather mystified by
the array of products.
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