Csco has lots of challenge ahead of itself. Csco "sequential" earning growth has been slow (the past 2 quarter from .45c to .48c), selling at more than 10 times market caps/sales, high 99 projected P/E.
Sept. quarter may be the last OK quarter for Cisco in the short term. Dec. quarter will be a ? mark. Everybody is coming out with Chassis products with much better price/performance/features than Cisco Cat5, and 8500 series, CS Yago, Coms CoreBuilder 9000 (Gig Ethernet/L3 switchingnot yet, but will be in Nov.), Packet Engine, Extreme BD(in a month), Foundry BigIron (I heard it shipped 40 units in its first month), many are to Cisco's installed base. Junipter will be full speed ahead against Cisco GSR by December time.
Cisco can hype router vs.layer 3 switch. The reality is the world is converged on IP, less than 5% the market needs a router to support 9 different protocols. Layer 3 switch is 5 times faster router at 1/3 of Cisco's router price, EOS. |
