It is interesting to note, however that an investment in Intel between June 1995 and June 1996 was a money loser and the same thing happened between June 1997 and September 1998. Very, very few companies the size of Intel and Cisco die for any reason, but they can and do suffer for exetended periods of time due to various competitive pressures, technology-based and otherwise. However, for a Gorilla which has gotten killed by competitive tactics and pricing - try Kodak on for size (I know it's not electronics), perhaps Motorola in wireless (try to remember how dominant they were in cellular and paging in the early part of the decade).
I think the point of interest for investors is not whether Cisco will be killed by new competition - IMO silly to even consider for the time being, given the strength and depth of Cisco management - rather, whether like Intel competition will yield a period of slower growth, tighter margins or both. Cisco is in the midst of a massive transition - thousands of new people coming on board, shift in focus to the carrier market, getting up to speed on voice technologies, facing new competitors. It is quite possible that this transition will yield a temporary fallow period when earnins taper off for a while and the stock falls out of favor. We buysiders are a fickle bunch - it happened twice in recent memory to Intel, which was every bit as much a favorite in the early 90's as Cisco is now. |
