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To: George A. Roberts who wrote (6936)	8/13/1998 3:22:00 PM
From: Kenneth E. Phillipps	Read Replies (1) of 6980

George - You make some good points. All of us could have made more money by buying Cisco instead of Bay. All of us could have made money by selling Bay at 37. Cisco does have great margins and both NT and Bay have small margins. Cisco has monopoly power in the market for router sales in the enterprise space. That is where they get their huge margins. In my opinion, networking sales in the enterprise space will not continue to grow as fast as telecommunications equipment sales to the telcos and ISPs. Cisco will not enjoy these same margins selling into that space. They will not obtain obtain monopoly power in that space. Again, in my opinion, in the future, companies will oursource some of their networking business to the public networks and will not buy as much of their own network equipment. I think Chambers knows this and he is trying to increase Cisco's sales to carriers and ISPs. I guess we all have to make our individual judgments about how the future will play out but I will continue to buy Nortel at this very attractive price. Ken

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