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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 75.48

+2.0%

3:59 PM EST

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To: The Phoenix who wrote (26696)	6/30/1999 10:16:00 AM
From: Techplayer	Read Replies (1) of 77400

Gary, This purchase is outside of the CSCO model, so you have too look at it as an infrastructure purchase. They won't sell chips, but they will sell more product with these chips. IMO, having in house chip expertise for next gen networks saves CSCO money (unless you pay 435 mil) in the long run. Also, the complexity of the next gen hardware has limited CSCO's ability to deliver a viable product. Having the chip expertise in house may help here. Relying on vendors to deliver on schedule is also a concern that can now go away. CSCO does not intend to outsource this technology, so they are not a microelectronics company. Lastly, I would imagine that CSCO would want their proprietary designs at the ASIC level to remain that way. They can now do that. There are a number of upsides, again imo. They just paid too much. Brian

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