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

To: getgo234 who wrote (5397)	4/17/1998 11:50:00 AM
From: RFF	Respond to of 6980

getgo234 I think the adjustment you're referring to had to do with the price protection warranties - which took about 1% of gross margins. I think the majority of this had to do with the drop in 350T prices. When BAY cut these prices to head off competition, I believe the warranty required them to make up the diffence for customers who bought before the price cut. This is a one-time hit though. BAY does record sales when products go into the channel, but I'm sure they have a return policy with channel partners like most of the tech industry. Stuffing the channel can help sales in the very short-term, but will come back and bite you through returns if the products don't move through to customers. This is especially harsh for the tech industry because of how fast products become outdated. Keep channel inventory low is a major focus for most of the high-tech industry because of this - moving to the build to order models. Hope this helped a little.