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Technology Stocks : Nortel Networks (NT)
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To: telecomguy who wrote (5079)3/21/2000 10:56:00 PM
From: Jules V  Read Replies (1) of 14638
 
Re: <<<these leading optics companies are CHOOSING Nortel.
Their main goal is to get their products (as their financial goal is not even in doubt) into the market place, they have bet on NT as the best company to get their technology installed.

...he who controls the backbone will have big advantages right through the rest of the network -- down to the enterprise >>>

.............................................
These are all excellent points IMO.

``This was an easy decision to make,' said Dr. Tayebati. ``We went with Nortel Networks because we see them as the global leader in the Optical Internet and see this combination as the ideal way to bring our pioneering technology to the global marketplace.'

"The global Optical Internet market is expected to grow from US$19.4 billion in 1999 to US$52.3 billion in 2003, a compound annual growth rate of 28%, according to Ryan Hankin Kent. "

.....................
On the other hand how many $1.5-3.0B buys can you make to get into a market of this size? After nearly $8-10B buying recently, a fairly high price would seem to being paid by NT for this optical market. But they must buy thats for sure.

Lots of ball team owners don't make money or go to the government for breaks, although not the Yankees I guess. And Cisco has made a career of buying companies, but how many in the past were in the multi-billions other than Stratacom (ATM?). I don't know if CSCO ever made money on Stratacom but it doesn't seem to have hurt them either. Of course since NT paid about $10B less for Bay than LU paid for Ascend, maybe they've got $$ left over. And NT did successfully integrate the Bay IP switch/router products at internet speed into their optical switches. But then LU already had a mirror product and didn't have to buy it even if its not quite as good.

At twice the market cap of NT -- the market still seems to think CSCO's the biggest gorrilla here. but I'll stick with NT.

2-3 years ago the Cisco "story" was: only end to end (enterprise) vendor, router marketshare, 30-50% growth, and IOS. Have they got as dominant a new story...and is IOS still so important? Hmmm...
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