Cisco VP Says Co. Is Leader In New
Networking Industry>CSCO
By Joelle Tessler
NEW YORK (Dow Jones)--Cisco Systems Inc. (CSCO) is the leader in
the industry that is being formed by the convergence of the data and voice
networking businesses, company executives told Cisco employees in an
internal memo Tuesday, according to Cisco Executive Vice President Don
Listwin.
Listwin told Dow Jones that Sprint Corp.'s (FON) recent decision to use
Cisco equipment to build a new network that can handle voice and data
traffic underscores that "a transformation is taking place" and that Cisco is
leading the way.
"There is a huge new market opportunity with the convergence of voice,
data and video," he said.
Listwin said the internal Cisco memo said giant telecom equipment
companies such as Lucent Technologies Inc. (LU) and Northern Telecom
Ltd. (NT) are "responding to us" as Cisco emerges as a dominant player in
this "new world."
The executive said Nortel has responded by acquiring Bay Networks Inc.
(BAY), a key player in the data-networking business. That deal, which had
been expected for months, has further fueled rumors that the big telecom
equipment makers will buy data-networking equipment makers as the lines
between the two industries continue to blur.
And Lucent has responded by buying up smaller players in the
data-networking market, Listwin said. The company has also filed a
patent-infringement against Cisco alleging that Cisco is using Lucent's
technology in routers and other data-networking equipment.
The New York Times reported Tuesday that Cisco had approached
Lucent and Nortel about forging partnerships, but was rebuffed by both
companies.
Listwin said that while Cisco will spend $1.3 billion on internal development
this year, the company will purchase smaller players or partner with market
leaders to gain access to technology when it can't provide the No. 1 or No.
2 product in a market.
Referring to the second possibility, he added that while Nortel and Lucent
may not be interested in alliances, there are plenty of other potential
partners out there.
"Lucent and Nortel aren't the end-all, be-all," Listwin said, noting that
Nokia Corp. (NOKA), L.M. Ericsson Telehof 8.1 million. Earlier, the
shares reached a 52-week high of 87.
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