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To: WBendus who wrote (3193)	12/16/1997 11:51:00 AM
From: Doug	Read Replies (1) \| Respond to of 6980

Hi Wayde: Thx for posting that DLJ report. I would agree that the growth in the Hub/Router mkt might be near flat but good in the switch/IP Switch mkt. You mentioned margins. As Routers have been with us for a long time , would it not be correct to assume they will be subject to greater competition and lower margins vis a vis GE Switches.?

To: WBendus who wrote (3193)	12/19/1997 2:36:00 PM
From: Ishmael	Respond to of 6980

I don't mean to worry you, but the margins on routers are signigicantly higher than on the layer-3 Accelar gear. The margins on routers continue to be high because consumers basically have two places to buy routers, Cisco and Bay. GE switches and routers are meant to displace this other gear and be price competitive with other GE solutions (lord knows there are a lot of those)so the margins are pretty slim compared to routers. Again, I'm not saying that the margins on the Accelar line are bad, just not as great as the routers. If I were going to make a SWAG, I'd say that the COGS on a GE switch with routing is around $100-120/port for 100Base-T maybe a little less. That's my $.02 Ishmael