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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: bgg who wrote (27889)	2/9/1999 10:09:00 PM
From: joe	Read Replies (1) \| Respond to of 45548

bgg, yes I've seen some of those numbers, and the numbers that CSCO reported after their last earnings. I reference to your last post and this post, I think the thing to do is to break down the numbers and compare them point by point. But, to be honest, I am highly suspicious of CSCO's numbers. Just my opinion, but I feel a lot of it is artificial. Especially when they start talking about Cable Modems, Gigabit Ethernet, and a few others. The SM&E and consumer network sector numbers just don't jive with me. I'm wondering if CSCO is outsourcing a lot of this stuff and claiming it as revenues on their part. Even, if the numbers are not too far off, I'm mostly interested in seeing the growth rate of COMS anyways. I think that some of the new markets that COMS is going into, that are being developed, (consumer, cable, xdsl, sme, wireless, etc) will have plenty of business for all (and I have doubts how CSCO will protect margin erosion; probably as you say, they will outsource many parts, but they do so with the main intention of adding a higher-end product to the sale; but again, how do they fiddle with the numbers?) So, bottom line, I think we all need to get the "hard data" from each company and look at the numbers. Hard work, but I think it will resolve a lot of disagreements we have. Another thing: if COMS can maintain a good market share in the same product as CSCO, then IMO, CSCO won't be able to cut its prices nearly as well as COMS. That's why I'm in COMS partly. I think they can carve themselves out a good niche in the network sector and offer low-cost and quality products better than anybody else. Also: yes, COMS does compete with CSCO in the enterprise, but not full force. So, I disagree with you there. Yes, I think Eric B. wants to get there somehow, but it's not part of the main strategy at the moment. The idea is eventually to get CSCO into a price war and still offer quality end-to-end solution. The distribution channel is working very hard in areas of training, knowledge, and support. I think this is better for networkers than having a constant in-house support staff. Also, re: online sales. COMS has the channel to incorporate this into the system. Channel dynamics are changing drastically from my understanding. They are helping to cut costs, provide better high quality support at all levels...so a good rapport with a good channel can still be a winning strategy. And, online sales is a necessary prerequisite to cut sales, but not all that easy to implement, but fortunately COMS is just about set up for it. So, advantage for CSCO, and advantage for COMS. That's my point. JMO. joe