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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: jghutchison who wrote (11352)	7/23/2001 1:15:36 AM
From: cfoe	Respond to of 12623

Although the article below does not relate to Ciena directly, it does offer some radical predictions that will (if they come to pass) affect the whole sector. (Note - I cannot vouch for the quality fo the writer or his source.) Link (to a subscription service): opticalalert.com Today's focus: Major mergers coming? By Jim Duffy Look for Cisco to make a radical departure from tradition and merge with a major telecom player. Also, look for Ericsson to acquire its core Internet router supplier, Juniper Networks. Those are the possibilities raised recently by the Technology Business Research Institute (TBR), a New Hampshire think tank that performs quarterly analysis of networking vendors' financial progress based on their business models. The Cisco/Nokia, Ericsson/Juniper marriages were raised in TBR's most recent report, which was issued last week. In that report, TBR states that the halt in telecom spending will prompt a "massive and rapid consolidation" over the next 12 months that will "lead to a radical change in the industry structure." The size of market opportunities has shrunk with the halt in spending, so consolidation is inevitable, TBR says. As such, "top competitors cannot rule out mergers that would have been unthinkable a year or two ago," the firm says. TBR believes Cisco will seek "first-mover advantage" in this industry consolidation by radically changing its growth- through-acquisition strategy. Cisco has historically gobbled up smaller, easily digestible players over the past 8 years: 71 such companies in addition to StrataCom in 1994, which, from an integration standpoint, was Cisco's most ambitious and challenging acquisition to date. But now, Cisco will look to merge with another major player as a market-share move into wireless and voice equipment, TBR believes. "Based on our analysis of consolidation scenarios and competitive benchmarking of business models, we believe one scenario to consider is a Cisco and Nokia merger," TBR states. "A Cisco/Nokia combination would create an extremely powerful networking and communication equipment company that could leverage opportunities during the downturn based on their strong business models and combined market positions" in data and wireless voice, respectively. TBR believes the time is right for Cisco to go through the pain of a major merger while the industry is in turmoil and its competitors are going through major restructuring efforts. TBR is less specific about an Ericsson/Juniper union, noting only that Juniper is already a close partner with reseller Ericsson, which needs IP networking to fill out its wireless infrastructure portfolio. Juniper and Ericsson are already working on a mobile IP gateway for 3G wireless networks.