Cisco's dominance gets new challenge by 3Com deal: networking leader has weak spots but plenty of ability to defend itself

Article Abstract:

Cisco Systems, considered by many analysts in the same class with Microsoft and Intel as technology leaders, is still facing challenges, including rival 3Com's recent $6 billion purchase of leading modem maker U.S. Robotics. Cisco has a $40 billion market valuation, and double the sales of second-largest networking vendor 3Com, but many small networking companies are striving to compete. Cisco may soon be competing with Microsoft, which is preparing a software-based router which would take the place of Cisco's premier hardware product. While Microsoft's technology cannot match Cisco's high-end routers, the software giant is clearly moving toward the networking market: 30% of the two companies' product lines may be directly competing in five years. Gigabit Ethernet and IP switching are new technologies which Cisco must address. With its stock prices extremely high, Cisco has tremendous resources to buy other companies or invest in development.

Telecommunications equipment industry, Telecommunications equipment, Company analysis, Company business planning

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Cisco tries some networking to quell negative rumors: displays of 'vaporware' at trade show meant to reassure doubters

Article Abstract:

Cisco Systems will use the occasion of the Interop trade show, to be held in the week of Oct 8, 1997, in Atlanta, as an opportunity to showcase products that are not yet ready to ship. Cisco is taking the unusual step in an effort to calm anxieties about Gigabit Ethernet switches and routers built around Granite Systems' technology. Cisco acquired Granite in Sep 1996, in a deal valued at $220 million, and even at that time, industry observers said it was a high price to pay for a start-up company that lacked a completed product. Now, 13 months later, Granite still has not shipped anything, and meanwhile, other start-ups have been selling Gigabit Ethernet products for months. Industry observers now are saying the episode shows that Cisco can no longer innovate as fast as its smaller, more nimble rivals, but the observers add that because of its marketing strength, Cisco can afford to be a little bit late.

Product development, Product information, Equipment and supplies, Company technology development, Company product planning, Ethernet, Gigabit Ethernet, Granite Systems Inc.

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Cisco beats forecasts on surge in revenue

Article Abstract:

Cisco Systems capitalized on robust demand for all major lines of its computer-networking equipment to report 3rd qtr 1998 operating earnings that surpassed expectations, as well as a 33% improvement in revenue. The company's net income of $64.6 million, or six cents a diluted share, represents an 83% decline from the 3rd qtr 1997. Several one-time charges prevented Cisco from attaining a profit of $483 million, or 45 cents a share. By comparison, a First Call poll of analysts had expected a per-share profit of 46 cents. The profit also exceeded 3rd qtr 1997 operating income of $358 million, or 35 cents a share. Cisco's revenue leaped from $1.64 billion in the 3rd qtr 1997 to $2.18 billion in the 3rd qtr 1998. The networking leader's revenue growth is 50% higher than that of most other rivals.

Finance, Company sales/revenue, Company sales and earnings, Company earnings/profit

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