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The ultimate judgement will come when CSCO announces their earnings report. IMO, there is a 50% chance of CSCO saying about the future qtrs to be soft and margin to be lower. Note that, CSCO has been making many announcements, but the majority of these announcements are not major contracts or deals. In 1999, CSCO will be tested in many areas, coming from large telecom companies (LU, NT, ALcatel, Ericsson), the new GBit startups that have matured (Extreme, Foundry, Alteon..), the high-performance IP switch router bunch (Avici, NetCore, Pluris, Juniper..), and big ATM players (ASND, FORE, COMS, LU, NT). One has to wonder, with this much competition will the profit margin not going to suffer? IMO, it very likely will. CSCO needs to be extremely good at all fronts to compete with these companies. This can be tough as the burden of co-ordination and management(both business and network management) of all these acquired companies' products can become heavier and heavier. The downside contributor from this burden is that new products development suffers, and thus the competitive edge. Remember what was said, CSCO needs to be extremely good to compete at all fronts. |
