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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.42

+4.6%

Nov 13 3:59 PM EST

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To: Monty Lenard who wrote (44557)	12/14/2000 8:44:24 PM
From: Jorj X Mckie	Read Replies (1) of 77398

I suggest you get away from the belief that there is a new world and old world economy. he didn't say economy, he said "communications sector". And there is a difference. The capex spending slowdown has been in circuit switches (old world), not packet network products (new world). As long as 3 years ago, I was aware of service providers cancelling orders for Class 4 switches and ordering packet based networks with gateways to the circuit switched networks. Same thing happened in the enterprise. Even though IP telephony was not fully baked, many enterprise customers stopped buying Definity and Meridian PBXs because they were worried that they would be making long term commitments on technology that was going to become obsolete. One of the ways that LU fought this was to practically give away 5 year leases on PBXs to keep out IP telephony products. Of course this cut off the flow from the cash cow. This slowdown in capex spending of circuit switches was not unexpected by everyone. In some cases, it was part of the plan.

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