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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Sharck who wrote (14791)	4/4/2001 9:44:20 PM
From: 2MAR$	Read Replies (1) \| Respond to of 37746

Don't forget to reshort the losers if the market does go pop, I'm making my list ..... Cisco seeks to revive sales by aiming at fast-growing metro mkt By Eric Lai SAN FRANCISCO, April 4 (Reuters) - Cisco Systems Inc.'s <CSCO.O> announcement on Wednesday to abandon a still-born core optical router is the networking giant's latest step toward the nascent but fast-growing metro-area networking market, as the company seeks to revive recently-slumping growth, said analysts. The decision also throws down the gauntlet at competitors large and small, including Nortel Networks Inc. <NT.TO>, Redback Networks Inc. <RBAK.O>, Riverstone Networks Inc. <RSTN.O> and Extreme Networks Inc. <EXTR.O>, who have, along with Cisco, all been able to carve out strong niches - but no clear dominance - in this nascent market. "This is a real growth market with a lot of VC-funded start-ups," said Maria Zeppettela, a networking analyst with Probe Research. "There are no real leaders in that space." Cisco said it is shifting its engineering talent that had been focused on its 15900 Wavelength Router, which analysts said had technical problems and few customers, toward the metro gear market. Metropolitan-area switches and routers are used by telecommunications and Internet service providers to direct Internet and networking traffic within a limited area such as a large city. The market for these products have been slower to emerge, as telecommunications carriers over the past few years concentrated on building out their long-distance networks. While the market for long-haul networking gear remains the largest, it has slowed, partially due to cutbacks in capital expenditures by telecommunications carriers. That contributed to Cisco's announcement of layoffs and a warning that its third quarter sales would fall about 5 percent from the second, a first for Cisco since it went public in 1991. Carriers are also realizing that while they have an excess of long-distance bandwidth, they lack adequate pipes closer to their actual customers - businesses and individuals. "This is where the bottleneck is perceived to be," said Zeppettela. Over the long term, the market for metro-area gear will eclipse that for long-haul gear, said Paul Johnson, an analyst with Robertson Stephens. Cisco already has a strong foothold in the metro-area market, via its acquisition of Cerent Corp. in August 1999. From that acquisition, Cisco leads the market for metro-area SONET gear, with Redback in second place. Cisco said in late January that it sold more than 20,000 units of its ONS 15454 metro-area box to telecommunications carriers, which cost about $100,000 each. Meanwhile, Redback said on Monday that sales of its metro optical gear, called SmartEdge, grew "substantially" from the prior sequential quarter, but did not meet earlier targets due to some customer deferrals. Cisco is relatively late to market in other segments of metro-area networking. In March, Cisco introduced its first line of metropolitan DWDM (dense wavelength-division multiplexing) networking gear, technology obtained through its $800 million acquisition of Qeyton Systems last May. Current companies in this space include scrappy start-up ONI Systems Inc. <ONIS.O>, which claims to lead the still-small market, and Nortel Networks, which is trying to extend its dominance of the long-haul DWDM market into the metro arena. Cisco in February also announced its first 7600 optical switch router, which will compete with already-released products from Extreme, Riverstone, and Foundry Networks Inc. <FDRY.O>. ((Eric Lai, San Francisco newsroom, 415/677-3919, eric.lai@reuters.com)) REUTERS * end of story *