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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: FR1 who wrote (50867)	4/1/2001 8:39:04 PM
From: Buckwheat	Respond to of 77397

There is hope for any tech company having excess inventory. It's called the United States Government. Outdated specs and an excessive procurement lead time. However, I wonder if things are really as bad as a $4B obsolete inventory. As little as a month ago, we had problems getting some ordinary pieces of equipment from them. The 4000 series switch chassis I believe was one of the recent things we had to wait a few weeks on. I have wondered about the company's demo program though. There could be a significant amount of equipment at customer sites that is still owned by Cisco. Don't know how they account for and value this equipment. There are probably a number of things Cisco can focus on that will add more value to the company. Business has been so good and growth has been so rapid that the shotgun approach has been more than adequate until recently. The upgrade business is one thing that Cisco has ignored. Cisco memory products are purposely priced excessively high so that customers will go elsewhere to by add-on memory. Cisco prices memory 6 or 8 times higher than most add-on memory resellers. This is millions of dollars that Cisco gives up to other resellers because their major end item business has been so good. There is no question in my mind about what kind of margin Cisco could make on upgrade/enhancement supplies if they elected to focus on it. So maybe in the near future we'll see things controlled a little tighter and maybe we'll see Cisco begin to take back some things that they have left to others because of greater priorities. IMHO Cisco is way over-sold, but they are going to have to tighten up and focus on things better before the valuation moves back to those lofty levels. Buckwheat