Cabletron Systems (CS: NYSE) Message Board

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Technology Stocks : Cabletron Systems (CS: NYSE)

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To: Harold S. who wrote (3713)	6/2/1998 8:53:00 PM
From: PaperChase	Read Replies (2) of 8358

"Cabletron Systems today announced at the ATM Year '98 trade show, drastic price reductions for GIGAswitch/ATM modules." These "drastic price reductions", they are a good thing right? They will help CS's gross margins, right? Companies always drastically cut prices when demand exceeds supply, right? Just like the way Intel has been unaffected by its price drops, right? Nope. I don't believe any of this for one minute. The market is saturated with competitors; customer IT budgets are, for the most part, frozen; and prices are falling in a futile effort to stimulate demand; which will lower gross margins; which will create losses if expenses aren't controlled; which will result in industry consolidation. And what do you see from all of this?

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