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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: jethro who wrote (3715)	1/21/1998 9:42:00 PM
From: rupert1	Respond to of 6980

Jethro: I know that the DLJ had been wrong previously about the shipping of Acceleras. But I thought his comments today were suggesting something new - that the logistics of getting it out were proving difficult and this was disclosed during the CC. But maybe not. On your other point about 66% of sales being to "new customers". I am guessing that you refer to the 59% of revenues coming from new products. This was in the CC and also in House's appearnce on CNCB. Haines questioned him on it and asked him to define "new". House said it meant upgrades and completely new products which did not exist twelve months ago. This linked in to his other answer when Haines asked him how he would compete with CSCO given that BAY is only one tenth its capitalization and CSCO could start a price war. Part of House's answer was to point to BAY's new products, whcih givese them pricing power, and that they were superior products, and their getting to the market ahead of CSCO. He also said that BAY might be one tenth of CSCO capitalisation but one third of its revenues. The implication here is that BAY's share price - or capitalization - is out of line and the gap with CSCO should close a bit. There was another implication and that was that if BAY continues what it has done for three quarters, namely, outgrow CSCO on a sequential percentage basis, then the ratio of BAY and CSCO revenues should continue to alter in BAY's favour. Vepoc