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

To: Lerxst who wrote (13268)	4/12/1998 9:00:00 PM
From: The Phoenix	Read Replies (4) \| Respond to of 77399

So, in effect you're saying that routing switches have no value-add in software and therefore Cisco will not be able to command high margins by selling this software (IOS). That is everything will be done in hardware precluding the need for software and therefore drive the total cost of the equipment down. We would be remiss if we didn't point out that indeed much of the task a router does in software will be placed into silicon (ASIC's), but far from all of them. What with network security, directorys, QoS, etc. etc.. there is still signficant value add in Cisco's IOS. Additionally, ASIC's are not cheap. This additional chip will reduce the complexity of software perhaps making it less valuable assuming my second paragraph is a pipe dream. But even so, the hardware pricing will fundamentally not change much. Am I smoking dope here? And if I am, you still have a lot to do to convince me we're talking an order of magnitude in price as you claim. Where are you getting your numbers? What hardware components are being removed other than perhaps some memory? Where is the manufacturing cost savings that allows corporations to build a better product for 10cents on the dollar? Gary

To: Lerxst who wrote (13268)	4/12/1998 9:42:00 PM
From: primepower	Respond to of 77399

Better tech answer than I could give. Hasn't Cisco already hinted in their 10K that margins will come under pressure in the future??

To: Lerxst who wrote (13268)	4/12/1998 10:35:00 PM
From: LWolf	Respond to of 77399

Lerxst & Gary - I'm not able to compete with your technical discussion, however the point the Lerxst raised re: >>This strikes me as a "challenge" to Cisco's management.<< Please consider that most of CSCO's success is because of their management team. I believe Chambers has established a culture of the best and that management team will fill any gap in product margins through new products, value-added services and other efficiencies. Companies are winners, not only because of great products, but because of great management, visions and strategies. CSCO has all, and I would only be worried if something happened to Chambers. Best regards, Laura very long CSCO.