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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Kent Rattey who wrote (5593)	1/18/1999 9:30:00 AM
From: KYA27	Read Replies (1) \| Respond to of 21876

From various wire service reports: "This merger positions Lucent to be a clear leader in communications networking and will have a significant, positive impact on enhancing shareholder value," said Rich McGinn, chairman and chief executive officer of Lucent Technologies. "Virtually every major service provider worldwide is making decisions on how to engineer and deploy its new or evolving network for data, voice, fax and video services," McGinn continued. "On the short list of companies that service providers want to work with, Lucent and Ascend together will lead the pack. This merger makes our portfolio broader and more powerful, and gives us the edge as we develop the next generation of networks." Based in Alameda, Calif., Ascend Communications is a leading provider of wide area network (WAN) core switching and access data networking equipment for telecommunications carriers, Internet service providers, corporations and government users worldwide. "As successful as Ascend is as a stand-alone company, this merger takes us to a higher level," said Mory Ejabat, Ascend president and chief executive officer. "Lucent enables us to give customers a more robust, end-to-end solution, and it complements Ascend's market-leading technology. The future of both this industry will not end like a shoot out in a bad western movie. Lucent will continue to rake in huge revenues from their voice side of the equation. Where they will fight it out is for the building of tomorrow's computer networks. We can look forward to both companies to increase their advertising budgets to gain exposure. The primary focus of many networking firms is the development of the next generation of computer network technology. Called Gigabit speed, it is the next jump up from the Local Area Network(LAN) standard speed, 100 BaseT. Lucent recently announced a 40% price decrease in its flagship products in this arena. Price competition in this field could lead to a squeeze in profits. Although Cisco has the huge market share advantage, Lucent can pour money into development from the profitable telephone business. They can use their larger financial resources to initiate a price war for market share. As the underdog, Lucent can either compete on product features, price or both. Count on them to do both. The end result will probably be Lucent will add to its market share by using its advantages. Both companies will probably survive and push weaker rivals out of business. Merger mania is probably just beginning in this field. 3Com Corporation has been placed weaker position. Look for the smaller companies in this business to sell that line of business or look for merger opportunities. The future probably provides significant opportunities for the patient in this business.