Most investors are still unaware of the drastic changes taking place in this market. When they actually start to realize the facts, it may be too late.
What are these drastic changes:
(1) This is the first time in CSCO's history that the large telecom companies are
competing directly with CSCO in their own turf. LU PacketStar IP Router, LU
PortMaster 4 RAC; NT with BAY and so on. Even INTC is going into the networking
business by buying SHVA. Why, because the margin are still very good. Most
busineses will love to get 40% margin, not to mention 60% margin that one can get in
the high-end networking segment.
(2) This is the first time in CSCO's history that so many well organized and technically
competent startups are trying to steal mkt share. The GBit startups Extreme, Foundry,
Alteon, etc. have already stole some market away from CSCO. Next year, the high-end
IP switch router startups (AVICI, NetCore, Pluris, Juniper) will likely do the same.
(3) This is the first time in CSCO's history that large European telecom companies such
as Alcatel, Erisson are competing directly with CSCO. In Europe, it will be very tough
for CSCO to compete with them
(4) This is the fisrt time in CSCO's history that ASIA is so much in trouble.
So, based on these facts, imho, it's very likely that CSCO is going to be in tough times
ahead. Possible that more downgrades will come. |
