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Tuesday, February 08, 2005

Cisco - Tough But Attractive Options Ahead

We covered in the past that cisco is focussing heavily in asia, where the internet growth is the fastest and shall remain so for severla years to come. We also covered Cisco getting 17% of sales from Asia. The wall street journal writesCisco is getting into new areas to maintain growth levels. Excerpts with edits:

Technology companies have spread like kudzu, thriving by sending taproots into the wellsprings of cash that companies once earmarked for other purchases. As a share of what businesses spend on all sorts of equipment, technology spending has generally risen - however quickly businesses were upping their capital spending, the amount they spent on tech was growing by more.But recent data from the Commerce Department suggest that tech's portion of spending has begun to level off, with the implication that overall spending on tech will increase only as fast as spending in general. It's a different sort of environment -- one that can be hard on tech companies.
For the big networking company -CISCO, the challenge of a slower growth environment may be even tougher than for other tech outfits. The personal-computer market may have matured, but at least there are workers all over the world spilling coffee on keyboards and dropping laptops. The routers and switches that make up the bulk of Cisco's sales don't get the same sort of wear and tear. At the same time, the bottom end of the switch-and-router markets is becoming increasingly crowded by low-cost producers.To fight this, Cisco is banking that enough companies will upgrade to the improved functionality and power of its newer wares. At the same time, it is pushing into newer growth areas - like Internet phone-calling equipment -- which, because they are high growth, have attracted plenty of competitors.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"