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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 72.34

-2.9%

Nov 4 3:59 PM EST

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To: The Phoenix who wrote (20945)	1/19/1999 2:39:00 PM
From: Mr.Fun	Read Replies (3) of 77397

Absolutely not. This analysis is restricted only to Cisco's high-end router business consisting of GSR12000s and 7500s. I was responding to a post which claimed that it did not matter if Cisco lost market share in high-end routers. It does matter. If profit growth in high-end routers flags while the market adjusts to new competitors and lower prices, a new source of profit growth must emerge. Certainly Cisco will penetrate new high growth markets AND increase market share in markets where it currently has a small presence. Voice, cable, consumer, etc. Cisco will penetrate all of these successfully. My only fear is that it will not be able to do so quickly enough to make up for NEAR-TERM slowness in its other markets. If you think the new markets will make up for the 85% of Cisco's base revenues that will grow in the low 20%s in 1999 enough that it can grow the top line 35-40% as expected by the street, so be it. No arguement that Cisco is a truly great company with tremendous opportunities, rather that current expectations don't give management enough room to manouver during a difficult transistion into new markets.

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