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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.19

-1.3%

11:50 AM EST

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To: RetiredNow who wrote (38303)	7/14/2000 10:19:09 AM
From: telecomguy	Read Replies (1) of 77397

Mindmeld, it's NOT that Chambers/CSCO miunderstood the importance of optics & wireless. They knew (like everyone in the world that's in the networking industry) that optics & wireless were the two key growth segments in the Carrier market. The REASON why CSCO is still a non-player is because it is VERY DIFFICULT to get into this sector overnight. You have to remember that at the end of the day, CSCO is a BOX company. Yes they sell expensive boxes too but it is still a box. Remember Compaq? They were also a good box company (PC in this case). Well they decided (like CSCO) to go upstream and go after the bigger customers by buying DEC and few other companies and presto -- they thought the orders from the Fortune 500 companies would start to roll in. They found out otherwise -- and took a terrible beating in the market. CSCO is going through same process and it remains to be seen whether they will suceed or not. Right now their dominance in Enterprise/Carrier router business is carrying them through and due to the fact that all the recent pricey investments to get into the optics/wireless is NOT being charged off against the P&L (the good ol' Pooling sleight of hand trick), CSCO's numbers continue to look very rosy. However, no amount of bookeeping sleight-of-hand will save CSCO IF the huge investment they are making into the Service Provider market does not generate the revenue commensurate with the issuance of billions of new shares as the earnings per share will start to stagnate...........then watch how far and fast the CSCO share certificate will get de-valued. Market will over-react and take 50% to maybe even 70% off the value of CSCO (in which case even I will jump into CSCO, Value investor that I am!).

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