>>Bloomberg reported that Cisco's market share for core routers had dropped 7% last year.
>>Yeah, to 79%. Cisco has Anti-Trust to worry about. Don't worry, Cisco has the products it needs to retain its position.
Sure, Cisco retains its market share, but loosing any of it to a competitor (especially several) is a sign of future stock weakness. How can cisco maintain it's revenues if its market is being eaten into? It sounds like the sultan of network equipment was caught taking a nap....Cisco dominating the market is one thing, but when Cisco tries to muscle in on future contracts (or existing ones for that matter) to the point of being obnoxious....all it takes is another competitor with a viable product for these people to jump from the Cisco product line.
I've been personally involved in 2 MAJOR contracts that Cisco had a shoe-in to win. All they had to do was treat the customer with some respect and stop the strong-arm tactics. Needless to say, in both these cases, Cisco was dumped for another vendor.
Another instance happened about a year ago. It involved Cisco actually forcing a customer (a fortune-500, no make that a DOW-30 customer) into a corner to purchase off another contract (all of this was going against the 1st contract in place). Reason?? To make another few bucks because the discounts were less on the second contract. By doing this, Cisco got their relatively small increase in revenue, but it so pissed off the customer that they are no longer buying Cisco gear at all!
Thats what you call penny-smart, dollar stupid.
Many of the Cisco marketing/sales pukes moved up in the company so fast due to growth (and due to the fact that the quality long-term reps are exercising their options that are worth millions and leaving the company). These so-called fast-track reps are in charge of major customers. Any other company would have realized that many of them don't have enough sense to be able to manage their checkbook, much less be in charge of major clientele.
At the current levels CSCO is trading, 12 months ago I would have said that CSCO was a good company, but a bad stock.
Now I would say that CISCO is a questionable company, bad stock.
I wonder what I will say in another 12 months?
I'm considering selling my 200 shares at this point.
I may leave allot on the table, but then again, I never frown on taking profits early either. It's better than taking them to late. ;-) |
