To: John Trader who wrote (59259 ) 5/5/2002 12:53:31 PM From: RetiredNow Read Replies (1) | Respond to I think you hit it on the head. High tech equipment like routers and switches go obsolete within a few years or get pushed out to the edge. There are a lot of engineers on this thread that know better than I do, but it's clear that the railroad analogy breaks down here. Another place where it breaks down is that I think they are comparing railroads to the fiber laid down, whereas, Cisco doesn't sell fiber. Cisco sells the equipment that helps route traffic over fiber, copper wire, etc. So the fiber plays like Corning are the ones that got killed and will continue to hurt due to the fiber glut. But you know, Internet traffic continues to double every year. That factor alone will dictate that this equipment continues to sell. Someone earlier mentioned that once Cisco sells equipment, then they have to find a new customer, because there is no residual sales to get. That's completely wrong. Once a Cisco partner, companies continue to spend every year on upgrades, spare parts, engineering services, service contracts, etc. It's a major residual business. Then similar to the PC market, there are upgrade cycles in the actual products every year. Not all equipment gets replaced, but Cisco and their competitors continue to innovate and make faster and more foolproof equipment with more bells and whistles. I know that it's very hard to believe right now, but believe me, the networking industry is still very much in its adolescence. This industry will still have fast growth at least until it gets to the point where every customer has fiber like speeds to their home, for under $50 per month. Mark my words, this will happen within the next 10-15 years. If you have that kind of horizon, like I do (actually mine is around 9 years), then Cisco is a decent bet. Already they are becoming a bigger fish in smaller pond every day. When the growth comes back, the Cisco shark will turn into the hump back whale with all the market share they gained in this down market. That is when it will pay off in spades for folks who are buying now.
