Cisco does a large percentage of their business with the carriers today - and one should expect even more in the future.
Large today? What's that, maybe 10%? More in the future? OK, I'll give you that one.
They sell to both enterprise and carriers (ASND is carrier only)
I wonder, if on a percentage basis, ASND sells as much to the enterprise, as CSCO does to carriers? Maybe someone with real data can set the record straight.
They sell switched, routers, cable head-ends, DSL headends, voice gateway platforms, multiservice access products (ATM, Frame, or IP). etc. etc..
Yes, they do have a bulging sales brochure. But how much revenue is that cable/DSL/etc. gear generating? I'd guess <1% of total. And routers and LAN switches? I'd guess 70% of total. ATM and RAC, maybe 20% of total. And IOS licensing, the rest.
ASND only sells ATM/FR switches...with a dabbling of access products.
Dabbling in access? Yes, they "dabble" as the #1 provider of RAC. And don't forget, all those switches, with the exception of the 550 core switch, are true multiservice platforms, which are field proven.
If Cisco succeeds in encroaching on ASND's bread and butter (ATM switching) where will ASND go? I believe this is the concern many investors have.
CSCO will be just another competitor, of which there are many. I think ASND is more focused on NT, NN, FORE, and LU than CSCO.
On the other hand, if Cisco get's hit by competition on one its product lines they have the ability to weather the storm because they are much more broadly positioned.
CSCO has a near monopoly on traditional routers, and a very strong LAN switching portfolio. IMO, they will continue to do well because of this base, not because of some perceived balanced revenue generating product portfolio. If CSCO misses a quarter, they will be punished just a severely as ASND, perhaps more so. One could easily argue, if router sales slow severely for just a single month, CSCO will be a 50-60 dollar stock very quickly.
BTW, I'm very long on CSCO, and am currently much more worried about them short-term, than ASND.
Gary |
