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

To: Stock Farmer who wrote (57048)	2/5/2002 2:42:55 AM
From: Jorj X Mckie	Read Replies (1) \| Respond to of 77397

John, I am an ex-CSCO employee, so my recollection isn't exactly third hand. But, one thing that I have learned along the way is that what a vendor perceives the realities of his/her market to be are often very different from the real world operational realities of the end-user. So, yeah, you are right....service gets done. And hey, if the box is cheap enough, just toss it and get another if it breaks. As for it being bad marketing for broken stuff to be out there....maybe the landscape has changed significantly enough for CSCO's attitude to have changed on this, but the policy was pretty well set in stone not to service grey market boxes. I could very well be wrong in all of this. Maybe I see a totally warped view of the world. We'll see in 12-18 months. If gross margins are back up to the 64% range once again then we'll know that mindmeld's right and that it was merely structural pricing issues that hammered gross margin. I don't think that the inability of GMs to get back in the 64% range is necessarily proof that the grey market boxes are still biting into CSCO's margins. I believe that the more time that goes by, the less meaningful grey market boxes will be.....(at some point, they do become too obsolete). However, this doesn't mean that the economy can't stay f'd up for some time going forward which can impact GMs in a number of different ways. It would be foolish to say that the grey market equipment isn't providing any pricing pressure, I just believe other factors to be more significant. And I do believe that GMs will go up someday in the future...but that will involve more pain to the sector as competition is reduced when the smaller players are culled from the herd. And I have no doubt that the big boys will not hesitate to do things that will expedite the process. Message 17007187