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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 84.82

+3.0%

Feb 6 9:30 AM EST

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To: Tom D who wrote (41095)	10/19/2000 9:34:48 AM
From: The Phoenix	Read Replies (1) of 77400

Tom D, There are many posts that answer your question. Here are some facts. JNPR announced that it had increased market share in the high speed router market last quarter. Thanks to work Jorj did last week we have estimated that this market contributes about 6% to CSCO revenues. CSCO surrendered (again this is only last quarter so we don't have any smoothed data) anywhere from 2%-4% market share depending upon which analyst you believe. So, when I do the math CSCO lost .025% ($50M) of their total quarterly revenues to JNPR. I hardly see that a "bleeding". I should point out that as far as I know JNPR is competing against a product from CSCO that is about 2-3 years old. Furthermore most of JNPR's wins I believe are due to the fact that they have OC-192 interfaces. So, if CSCO solves these issues with new product or interfaces I suspect the field will change... Do you think CSCO would not attempt to innovate in this space? Second, let's look at the markets that CSCO has been expanding into. Last CC Chambers mentioned that the optical business is expanding rapidly and at that time CSCO was on a $1B run rate. This new business/market appears to more than make up for the miniscule lost share in the high end router market. There was a recent study that was posted on Lightreading.com (might still be there) that showed CSCO's optical business grew faster as a percentage than any other company in that space. Pretty amazing when you think about it. It's pretty clear that this loss in share is being blown way out of proportion. We won't even go into other markets where CSCO is capturing share like cable, DSL, VoIP, content switching, etc.. The point I'm trying to make is you shouldn't get lost in the media frenzy around CSCO losing market share. Yes, we all know it's unheard of for CSCO to lose share. But given that CSCO practically owned the high end router market it's not surprising that market share would go in a negative direction - it's the nature of competition and economics. Due you own dd and stop reading the hype about CSCO being yesterday's news. If after you've done your own investigation you feel it is....at least you know it first hand.

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