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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (32460)	1/29/1998 12:53:00 PM
From: polarisnh	Read Replies (2) \| Respond to of 61433

I had to post the John Chambers' article that you were referring to: Cisco Eyes Industry Lead In Remote Access Concentrators By Lee Gomes SAN JOSE, Calif. (Dow Jones)--Cisco Systems Inc. (CSCO) expects by the end of the year to become the industry's No. 1 supplier in a key data communications product category, John Chambers, Cisco's president and chief executive, told Dow Jones. While Cisco currently is the third-largest seller of remote access concentrators, Chambers told Dow Jones that he expects the company to reach the top spot by the end of the year. Remote access concentrators allow hundreds or thousands of home personal computer owners to use telephone lines to connect with the computers at a corporate headquarters or at an Internet service provider. Ascend Communications Inc. (ASND) of Alameda, Calif., pioneered this market, which is currently valued at more than $1 billion a year, and is currently its top supplier with about 45% of sales. Even though Cisco has had competing products on sale for at least three years, it has never been able to move out of third or fourth place. That failure has been a major embarrassment to Cisco, which dominates nearly every other portion of the computer networking industry and which prides itself on its position as an industry leader. "We took a lot of heat on this, and a lot of people really doubted our strategy," Chambers said. "We were paranoid." Cisco lagged in the concentrator market, Chambers said, because its products were inferior. But he said that began to change with the introduction of new models within the last six months. Sales of the new units have been strong, he said, with the company achieving many design wins when going against Ascend as well as 3Com Corp. (COMS), the other major player in the market. Sales of concentrators are currently worth about $100 million a quarter to Cisco, said Chambers, and are growing rapidly. In its most recent fiscal quarter, Cisco had total sales of $1.86 billion. Increased success in the concentrator market would add to the pressure on Ascend, whose shares have fallen by more than 60% in the last year, owing to investor concern about both declining sales and Ascend's merger with Cascade Communications Inc. Last week, though, Ascend posted better-than expected quartely sales and profit figures, and its shares have risen by 11% in recent days. In the third quarter of 1997, Cisco's shipments of concentrators rose 8%, while those for Ascend declined by 22%, according to the Dell'Oro Group, a Portola Valley, Calif., industry research group. Shipments for 3Com rose 21% in the quarter.