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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.04-0.3%Nov 26 3:59 PM EST
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To: FESHBACH_DISCIPLE who wrote (43696)11/23/2000 12:43:13 PM
From: The Phoenix   of 77400
 
Which margins?

The margins on the optical equipment? How are you looking at this problem. NT's margins are a function of high margin optical sales and low margin circuit switch sales....as NT's sells fewer circuit switches their margins will increase...however if they continue to execute in that market margins will errode since late adopter markets are price sensitive markets. The optical market is not price sensitive today and as new functions are added (such as end to end wavelength provisioning) price points will not errode - at least anytime soon.

So, the question is... are you talking about overall corporate margins or segment specific margins. If you're talking about the later, where are you getting your data from since niether company breaks out segment specific margins.

Also another consideration is new markets - such as metro - which are still in their infancy - and what impact does that have on revenues and margins.

The trouble is that many value/accounting based views of this market and the companies within it don't work well because the market is still very volatile - with new technologies, solutions, and services being developed every day. it's not like selling "Coca-Cola" or running a bank.. this isn't a static environment where one can extrapolate current markets and products into the future because in 10 years today's markets and products will be obsolete... new products and markets and perhaps new competitors will exist. Technology marches on... think about it.

OG
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