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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 74.47+1.9%Nov 3 3:59 PM EST
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To: jach who wrote (17148)9/17/1998 10:20:00 PM
From: Peppe  Read Replies (1) of 77397
 
Jach,

<exactly, price war will trim the net margin and that is the point; trimming down by about 20% in my opinion>

You misunderstand. Due to CSCO's volume, they pay way less for components than a start-up. If most start-ups sell at their cost, CSCO could easily match prices, without affecting their margins too much. Witness CSCO's gain in the small to medium size ethernet switch market. They killed COMS and BAY, gained market share at low end of market, and still increased margins !! Unless there is a major paradigm shift in networking with a clear winner other than CSCO, their margins are safe.

Cheers,

Peppe
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