Jabil Circuit (JBL) Message Board

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Technology Stocks : Jabil Circuit (JBL)

JBL 210.71

+1.7%

Nov 28 9:30 AM EST

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To: Fenton White who wrote (2411)	1/11/1998 6:02:00 PM
From: BenYeung	Read Replies (2) of 6317

The reasons that CSCO (as an example) or other techs are using ECMs to produce their products are because CSCO have too much overheads and undated manufacturing facilities related to manufacturing that causes lower margins. To remain price competitive and profitable, they outsource to the ECMs, which has the manufacturing capabilities and cost effective manufacturing to make CSCO more profitable and to meet CSCO's production goals. To put it short, the shrinking of prices and margins of CSCO and alike makes them resolve to the ECMs. If as you said, JBIL's prices and margins are shrinking too, then who is making money??? How can have both the designer (eg. CSCO) and the ECM (eg. JBIL) losing margins? Sounds like a lose-lose game to me. Check out the ECM thread for addition info on why companies are resolving to ECMs. Best regards, Ben Yeung

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