<<reports that among the tech-oriented hedge-fund crowd, there's also a suspicion that Lucent's stock-in-trade phone equipment, based on a high-margin but older "architecture", is being eclipsed by newer offerings. So its problems could easily go a mite deeper than just an inability to handle an overabundance of business.>>
This is just not true, and these people are conjecturing. If anything slowed down switch sales, it was Y2K related delays in spending/upgrades. In many cases, due to large numbers of customers needing patches, LU distributed and assisted in remote installation of Y2K phone switch software patches not until during calendar 1999, something that could not have been conducive to selling new switches, or billable upgrades, to these customers during the same year.
Also, anyone who thinks any business other than very small businesses are moving en masse to PC based switching, or Voice Over IP to support their mission-critical call handling, is badly mistaken.
Lest anyone forget, this is not a scenario in which LU has warned of a loss, they had a few one-time events that converged to derail the growth in earnings they required to support a PE of 79 +. Bell Labs is actually cranking out great new products faster than LU can manufacture them. A serious operational problem, but not the end of the company.
jww |
