| Of course there is a difference, Dave. It's exageration for dramatic effect. The point is that in technology, these companies innovate or die. If the secondary markets are taking a toll on the company, then the company needs to take a hard look at it's research results to see why they aren't pumping out new products and functionality quick enough. Intel is the best at doing this. Cisco is not far behind, except for one difference. Historically, Intel has lead the curve, whereas Cisco has been known as a fast follower. In other words, they wait until they know for certain customer demand is there and then they look to see if the industry has created standards around that technology. If there are none, they work to create them. Either way, they then build products based on industry standards. Since the downturn in the economy began, though, Cisco started ramping up the R&D in lieu of acquiring technology and people. So what we should be seeing is rapid obsolescence in the secondary markets. As John said, the statistic to watch over time will be their gross margins. If it's down this quarter again, it's not the end of the world, but it is one trend to watch. My guess is that margins are down primarily because of inventory liquidation, not because of secondary markets taking their toll in a pricing war. John on the otherhand will have you believe that margins are under pressure primarily because of the secondary markets. Hogwash. |
