Re: Networking stocks. Yes, Intel's action could have had some impact on the network stocks, but there is more going on IMHO.
The networkers are going into a major transition from a mostly router based system dominated by Cisco to a switch dominated system dominated by "Anybody's guess". That's part of the issue: the winner in this next round has not been decided and Cisco is in the position of defending their fortress. They have an 85% share of the router business.
What Intel is doing IMHO is to follow a similar strategy they have used with motherboards, in that they see slower networks as a key
bottleneck to selling faster chips. That's why they dropped the price on the cards and nailed 3Com.
More and more, Intel, MSFT, and CPQ are coverging the PC platform with the network to stay ahead of the Sun's (Unix) and the NC platforms, and I believe they are winning.
As I understand it, there is very little that is proprietary in networking products. Keeping loyal customers and helping them expand their networks is how the best stay on top. While technology is not proprietary, margins are very high, and this too IMO is what Intel is starting to erode by using their Mfg. expertise to bring costs down.
It will be an interesting next six months. For a more techical discussion, see:
snci.com
HL |
