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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (4413)	12/1/2000 10:43:53 AM
From: Puck	Read Replies (2) \| Respond to of 5390

Don't forget that Ericsson owns 5% of Juniper. Beginning a couple years ago the analysts covering Ericsson began telling Ericsson management that they had better develop IP capabilities fast or else they would be left behind by the competition. They insisted that the best strategy for Ericsson would be to acquire that expertise through acquisition, as Lucent did with Ascend and Nortel did with Bay Networks. Ericsson management refused to do so, at the risk of analyst ire, saying that the prices they would have to pay were ridiculous. Instead they chose the "string of pearls" approach, which consisted of making venture capital stage investments in companies they could partner with for IP capability at a cost that would be so much more economical. I believe that the success they've had with their Juniper investment has substantiated their strategy and that, in retrospect, it was the right one to take. Juniper has taken the high end of the router market from Cisco, so Ericsson could not have found a better partner. Incidently, I believe Cisco's best days are past and that its stock will be relatively unrewarding.