Cisco is recession-proof, according to this article. :-)
2VO
Reuters, 01/16/2001 05:47
Cisco says could gain market share in slowdown
NEW DELHI, Jan 16 (Reuters) - The president of Cisco Systems Inc (NASDAQ:CSCO) brushed aside market concerns on Tuesday that the network equipment maker could lose momentum in the U.S. slowdown and said it could in fact gain market share in such a situation.
"We gain market share anytime there is a transition -- economic, product or technology," John Chambers told reporters on the margins of a conference with industry leaders during an Indian visit.
"If there is any economic slowdown not many small companies compete against us because they don't get the funding for a startup. Not as many companies take the risk that we do in terms of moving in (and) have the credibility to do that," he said.
"Actually in every economic slowdown we gain market share even faster than we do in regular times," he said.
Earlier, Chambers told leaders of the Confederation of Indian Industry (CII) that Cisco had said during the Asian economic crisis last decade that it would in fact gain from that slowdown.
"We were the first to see it and predicted it in our conference calls (with analysts)," he said.
Last week, Morgan Stanley Dean Witter said in a research report that "a tougher macro environment favours Cisco due to the significant resources that the company has to continue to invest in sales and development."
Cisco played down fears of a slowdown hitting the company early in December, saying it stood by its aggresive growth strategy and retained the aim of growing 50 to 60 percent in revenue every year.
But it struck a note of caution last week when Chambers warned that the current quarter had been a bit more challenging than anticipated on account of slower capital spending in the U.S. economy.
Cisco's shares have lost more than a third of their value in the last three months, following fears that it would be hurt by a slowdown. Its stock closed around $38 at the end of trading last week.
narayanan.madhavan@reuters.com))
Copyright 2001, Reuters News Service |
