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

To: Matt Meagh who wrote (32577)	1/30/1998 12:40:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 61433

First point of clarification - You state "Ascend/CSCC has never really done anything in switching outside of domestic RBOC's... No IXC's, very little (if any) international presence and ZERO in enterprise." I thought they recently (6 mos. ago?) signed a huge deal with China's telephone co. (Shanghai Tel ?). Was this not for switching equipment? I forget the size of the deal, but for some reason 200-300 million comes to mind. Yeah, I think this is correct. This is really their first big international win. CSCO/STRM have been in the international market for 7 years and a large percentage (a guess would be 40%) of their switch business comes from these markets. Note that CSCO won a similar deal in China. I'll have to look for the numbers on that one. Second, You state "I think your comment is very VERY weak.... more than that it's WRONG. The numbers demonstrate this clearly." You must have some pretty compelling numbers to show that Stratacom is NOT getting beat by Ascend. Could you please repost them or tell me where I can see these numbers. You may have already done so, and I just missed them, so I apologize if this is repetitive. I did this a few months back...unfortunately I don't think SI saves beyond a month. I'll give a brief recap here. If you need more info. let me know. This information comes by way of Vertical Systems one of the most respected analysts in the industry. ATM Equipment Worldwide Revenue NN CSCO NT Fore ASND 1996 ($1.1B) 19% 16% 11% 23% <3% 1997 ($2.0B) 16% 19% 13% 12% 4% ATM Carrier Switch Revenue NN CSCO NT Fore ASND 1996 ($356M) 30% 23% 16% - 4% 1997 ($598M) 36% 20% 12% 4% 5% ISP ATM Switch Revenue NN CSCO NT Fore ASND 1996 ($69M) 15% 9% 20% 9% 22% 1997 ($155M) 17% 30% 9% 14% 20% Enterprise ATM Swtich Revenue NN CSCO NT Fore ASND 1996 ($254M) 26% 13% 23% 5% - 1997 ($469M) 9% 29% 39% 8% - Ascend is only a significant player in the ISP switch market and this market is still very small in comparison to other market segments. Cisco is a big player in all markets and most notably has increased market share in ASND's backyard (the ISP space) threefold. So, when you say ASND's CSCC is beating up STRM, they certainly aren't doing it in ATM. So, let's look at Frame Relay, CSCC's other big business. Frame Relay Equipment Worldwide Revenue NN CSCO NT ASND 1996 ($1.3B) 8% 20% 8% 21% 1997 ($2.2B) 11% 17% 11% 13% Frame Relay Carrier Switch Revenue NN CSCO NT ASND 1996 ($650M) 9% 29% 6% 30% 1997 ($913M) 16% 16% 9% 22% ISP Frame Relay Switch Revenue NN CSCO NT ASND 1996 ($99M) 6% 10% 9% 56% 1997 ($250M) 9% 23% 5% 29% Enterprise Frame Relay Swtich Revenue NN CSCO NT ASND 1996 ($262M) 11% 17% 16% 12% 1997 ($451M) 16% 18% 20% Other (<8%) Frame Relay Access Equipment NN CSCO NT ASND 1996 ($342M) 3% 9% 6% - 1997 ($595M) - 16% 11% - In the frame relay switch market Cisco appears to have done a poor job at maintaining their market position. This market is becoming more fractured. This along with strong pushes by Newbridge and Alcatel has led to a drop in Cisco Market share in this single segment - note that this is not because of ASND however. ASND's market share has been nearly halved in this segment. Beyond this however Cisco has grown market share signficantly AND most notably in the only segment that ASND truely dominated. Again, the statment that the CSCC products are beating the STRM products at Cisco is a baseless statement. I would be remiss here if I didn't point out that Ascend has lost market share in EVERY SEGMENT they're in. Not a good track record. Furthermore while the frame relay market has nearly doubled in revenues ASND's revenues from this segment grew only $19M, to $289M from $270, this while Cisco's have increased $176M to $376M from $260M and a market leadership position! These figures don't favor Ascend at all. Hope this data helps. Gary