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Technology Stocks : CSCO - Cisco Systems

CSCO 78.16

+0.2%

Dec 26 9:30 AM EST

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To: Sam Citron who wrote (17)	12/11/1996 9:39:00 AM
From: Marie Thorsson	of 69

Sam - yes, they will. This is one of the advantages Cisco currently has over 3COM. Because Cisco is on the high end and often sells direct, their margins are higher. With their web-based customers, the margins must be fantastic, and if they can really put $1B through their web sales, that's fantastic news for margins. But as they hit the low end, overall margins have to decline. There's one thing everyone agrees on, though - the volume in the low end is going to be astronomical. Witness 3COM's share price explosion and the general perception that networking as a whole is going to grow at 35% over the next 5 years. So if Cisco can have some of the low end pie, it's good news for the share price regardless of the margins involved. It's a big pie.

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