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

To: x70sxn who wrote (11683)	1/21/1998 7:16:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 77400

Shrini, That report is dated 12/9/97...it's over a month old. What makes you think that these facts aren't already dialed in??? Don't get me wrong. I don't mind listening to new information that tells a factual story, but you're digging up information that's not new. The sales growth rate for lower-priced access and switching products targeted toward small and medium-sized businesses has increased faster than that of the Company's high-end core router products. Thanks to the internet! This is great news.... The high-end products have a great growth rate... the lower-priced products are simply taking off!!! some of the Company's more established product lines, such as the Cisco 2500 product family, have experienced decelerating growth rates. Yes, but is this errosion at the hand of competitors, competitive technologies, or other Cisco products? I'd like to suggest that it's the latter. The Company expects that gross margins will decrease in the future, because it believes that the market for lower-margin remote access and switching products for small to medium sized businesses will continue to increase at a faster rate than the market for the Company's higher-margin router and high-performance switching products. Yes... this is old news and Cisco says this every quarter. Trouble is they keep improving margin. Wall Street continues to wait for the reduction in margins that Cisco management talks about every quarter. Note that Cisco cited increased costs as a component of this margin issue. Also note the significant cost benefit being enjoyed by technology companies due to the currency crisis in Asia. I think that even though Cisco may sell a larger percentage of lower margin products as a whole that margins will suffer very little (if at all) due to cost decreases - not increases as cisco suggested in the 10Q. Remember the 10Q was drafted prior to the Asian flu and therefore did not consider this currency benefit. Finally, you may comment that Cisco will see a revenue impact due to lost Asian sales, but I think it's been stated a number of times that Cisco is far less exposed to this issue than are other networkers since the percentage of sales from Asia is a smaller percentage of Cisco's business than it is for the competitors. So Shrini, I you feel the need to short...pick a price to cover ;) Gary