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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Thomas Mercer-Hursh who wrote (42717)5/17/2001 1:31:52 AM
From: Bruce Brown   of 54805
 
Do we consider other companies as overall gorillas based on 7% of their product? Seems to me that, if routers are only 7% of Cisco's business, then either this isn't what makes Cisco a gorilla or Cisco isn't one.

Then you need to break down the router market share via revenues and growth via the quarterly Dell'Oro reports. I posted the latest on the Juniper board following the report's release:

Message 15812161

Here's a clip from one of the linked articles concerning just the high end router market (not the OC-3 to OC-12 market which had sales of $544 M in Q1):

"The total size of the router market fell 10 percent to $753 million in the first quarter of 2001 from the previous quarter, the largest decline since 1997. The only other time the market declined was in 1998 from the first to second quarter, when router sales dipped from $26 million in the first quarter to $25.7 million in the second quarter."

How's that for high end router industry growth? $26 M in Q1 of 1998 to $753 M in Q1 of 2001.

If you run the margins on the respective leaders in each of the segments, it's hard to make the comment that routers are a simple commodity. At least not in the analogy of a PC being a commodity product.

BB
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