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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 75.19-0.1%Jan 16 9:30 AM EST
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To: Kirk © who wrote (65671)7/1/2004 4:23:51 PM
From: RetiredNow  Read Replies (1) of 77400
 
See, I just fundamentally disagree with this thesis. Sure Cisco can make it up on volume if they get into price competition, but during the entire life of Cisco's business they have focused on the high-end, prefering to compete on service and on value-added products. That's marketing 101...engage in price competition only as a last resort.

What happens at smart companies like Cisco and Intel is that they are constantly innovating or buying innovators to put products on the market that actually cannibalize their older products. That way they keep their margins high on the newer stuff. The older stuff, they milk as much as they can, until it is end-of-lifed. They stay in the lead through innovation, not through artificially holding on to jobs which are no longer competitive advantages.

That's the virtuous cycle of innovation.
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