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Technology Stocks : Nortel Networks (NT)
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To: Stock Farmer who wrote (9406)1/23/2001 9:45:57 PM
From: The Phoenix  Read Replies (1) of 14638
 
John,

Wow.,.. you've lost me. That was a lot of talking but I don't have a clue as to what you are trying to say.

You say that NT classifies "enterprise" as a "customer segment"... and this differs from "enterprise" as a "market segment". Please elaborate on this if you could.

Second you go on to discuss product mix issues and how they can effect growth in a market... but the data is pointing to YoY growth which is independent of product mix... If NT, for example, has historically included PBX's in it's enterprise numbers and that market is shrinking then there is a material impact on the overall revenue generation for NT's enterprise business. This will be detailed in the YoY growth for the segment. I'm sure other companies have product mix transition issues and opportunties as well. The enterprise segment grew at around 25%-30% last calendar year - depending on who you believe... so 8% growth for NT translates into a net loss of market share.... unless you can somehow explain to me the difference between NT's "customer segmentation" and "enterprise segmentation".

Let me add a bit of color here to help you out... Enterprise customers are typically businesses - customers that are business... business that are larger than say 100 people but businesses public and private not in the business of providing internet, cable, or telephony services. So NT's customers that are enterprise customers are enterprise businesses??? Which is defined by the "enterprise market segment". What am I missing?

Now regarding my questioning of a statement made by MSDW... I can't tell you how many times the analysts have been wrong. The data MSDW is sharing is data - no doubt - provided to them by NT. And while there is sure to be some bias in these numbers - 8% YoY growth in the enterprise is by definition losing market share... I don't care what the reasons are - product mix or otherwise... the enterprise market (or NT enterprise customer segment) grew faster than 8%... that is a net loss of share. This is one of those discussions that you may want to fold up shop on my friend.

OG

BTW: yep, the perma-bulls are out of thier cages... should be good for a little run. I upped my cash position to 65% last week. A little too soon but what the hell.
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