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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: William E Hodal who wrote (3609)	3/12/1998 3:25:00 PM
From: Ian@SI	Read Replies (1) \| Respond to of 18016

Courtesy of the Fool... Digital networking products manufacturer Newbridge Networks (NYSE: NN) jumped $1 1/2 to $27 after two of its affiliates, Telexis Corp. and Televitesse Systems Inc., announced that they have agreed to combine their businesses, benefiting Newbridge's venture capital arm. Telexis and Televitesse, which both produce network video products, plan to combine their R&D efforts and operate under the Telexis name.

To: William E Hodal who wrote (3609)	3/12/1998 3:57:00 PM
From: pat mudge	Respond to of 18016

Bill -- I wrote to my friend at Siemens today to express my concerns about Cisco and got a well-reasoned reply. I also have a call in to someone in the MainStreetXpress division. In short: 1) Cisco is definitely trying all it can to get into the Telcos around the world as an end-to-end supplier. 2) They aim to be number 1 or 2 in every market they enter. 3) They are working their way from outside towards the core of the network, and NN will increasingly get in their way. 4) Some wonder how Cisco will be able to compete with the big players when enterering the core network which is being upgraded to ATM backbone. (Concern about seamless scalability from one end of system to the other.) 5) This [ATM] network must be able to carry voice, data and video over the same infrastructure supported by a good management infrastructure.[It] must work with the existing telephony embedded system (there are about 750M lines in the world already with thousands of different management systems). (TM made this clear in conference call -- the fact telcos don't rip out old equipment and start from scratch but must have systems that scale.) 6) NN is not alone. They --- with Siemens and 3COM --- have already announced the Carrier Scale Internetworking (CSI) initiative. (Allows them to target the business users with ATM technology and with guaranteed quality of service supporting IP traffic as well as voice and eventually video in a client server architecture with intelligent nodes controlling the ATM switches.) He summed up by saying the market is large and predicted to continue growing so it's likely there's room for more than one player to succeed. He also made it clear he's not an expert and all opinions are his own. I read Cisco's 10Q and they say their margins will slip going forward as the sales to "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." They also say their R&D expenses will increase at a greater rate than sales as "the Company invests in technology to address potential market opportunities." Whatever they can't develop in a timely manner, they'll buy or license. By buying their way into USWest, Cisco is admitting it's a tough market to enter and they can't do it merely on the strength of their products. Joe Kennedy may have paved his sons' entrances into politics but they each had to prove themselves once they were in. Same with anyone entering a new market. Just a novice take. Pat