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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: redwood who wrote (18440)	1/11/2000 11:52:00 AM
From: Rande Is	Respond to of 57584

Redwood, yes. . .according to a network specialist I interviewed on routers, CSCO has certain proprietary systems which require compatibility by other router makers. For instance, Bay Networks routers have compatibility problems, which has contributed heavily toward their downfall. I realize CS makes technically better routers than Cisco. . .but then the Sony Betamax was far superior to Panasonic's VHS, yet because people were already accustomed to using VHS and it tape length was slightly longer, VHS became the standard and Beta became a white elephant. Now the reason I like Lucent in the router biz is because they have revolutionary technology and the distribution to back it. . . thus, they could upset CSCO's apple cart. . .but that is a risky play. CSCO is king. Everyone knows it. . .and everyone has their stock and is happy with their purchase. It will take a major blow by Lucent to knock the king from the hill. But I am betting that they can do it. Now if CS has been the consummate takeover target. . . why have there been no suitors? I believe the answer lies in the Cisco monopoly on routers. . .you either play by their rules or you don't play at all. . . .much like the way Hayes became the standard for modem compatibility. CS is a good buy from a valuation standpoint. . .and the company is fine. . and the product is fine. . .but I don't see them ever becoming a high-flier, and if they are taken out, we are paid a premium [maybe] one time and the game is over. So I did not dismiss CS lightly from last years portfolio. Much thought went into the decision. Rande Is