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

To: RetiredNow who wrote (57020)	2/3/2002 10:43:48 PM
From: JeffT	Respond to of 77397

Well said...... I especially liked the "Hogwash" you added for dramatic effect! Jeff

To: RetiredNow who wrote (57020)	2/3/2002 10:54:55 PM
From: Dave	Respond to of 77397

mindmeld, There has been speculation of the "grey market" since the "dot com" bust. I believe Cisco is trying to discount these sector, however after reading that article, there are compelling advantanges to buying used equipment when "new" equipment only provides "marginal" performance benefits.

To: RetiredNow who wrote (57020)	2/3/2002 11:54:47 PM
From: Stock Farmer	Respond to of 77397

John on the otherhand will have you believe that margins are under pressure primarily* because of the secondary markets.* Yes, once again you have plunged headlong into that wallow of "dramatic effect" hogwash. It doesn't look good on you. Although you did characterize such hogwash correctly, you failed to attribute it properly. Unlike you, I am not a believer in any silver-bullet targetable "primary" reason for something as complex as the trend in Gross Margin. Reduced demand, secondary market, increased competition... (and so on)... any number of things are putting pressure on the top line even before we get to product mix, price/volume sales channel tradeoffs, inventory reduction and distribution of fixed versus variable costs... (and so on, to name a few)... So arguing as though there was one place to which shareholders should cast their greedy beady eyes and thus to look away... well, that's a rather naive and simplistic perspective if you ask me. John

To: RetiredNow who wrote (57020)	2/4/2002 1:14:16 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 77397

My guess is that margins are down primarily because of inventory liquidation Nice guess. But here's what Cisco's management guessed: The decrease in the gross margin was primarily due to a continued shift in revenue mix toward our lower-margin products and pricing pressure seen from competitors in certain product areas Apparently more attention to drama and less to detail? Or just "All hat and no cattle". Same thing in the end

To: RetiredNow who wrote (57020)	2/4/2002 1:39:57 AM
From: Stock Farmer	Read Replies (2) \| Respond to of 77397

My guess is that margins are down primarily because of inventory liquidation Another even more detailed guess by Cisco's management team: Product gross margin in the first quarter of fiscal 2002 decreased to 59.0% from 64.1% in the first quarter of fiscal 2001 primarily due to lower shipment volumes and related manufacturing overhead; shifts in product mix; and higher production-related costs partially offset by a benefit from the additional excess inventory reserve as discussed below. Excluding the benefit from the additional excess inventory reserve in both periods, product gross margin was 51.0% in the first quarter of fiscal 2002 compared with 49.1% in the fourth quarter of fiscal 2001.