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|User Info||What Does CISCO (CSCO) Mean?; entered at 2012-05-10 14:33:23|
Registered: 2009-02-28 DFW, Tx
I doubt vendor financing is that bad an idea, if it pays the bills. What do you think the markup is in this stuff? Seems most of this stuff costs around 25 cents on the dollar to manufacture, if my memory serves me correctly. These guys know the formula. There is also R&D and a time equation for a product before you have to upgrade it. More units per R&D provides a lower per unit cost. This isn't Y2K. One question is, how much of the off balance sheet stuff is bad debt. This procedure should be outlawed, as it gives no visibility to the investor. I am sure Chambers owns enough of the company he won't be too stupid. |
The key point is CSCO is a key ingredient in the mix of tech. Their stuff is slowing down, so is INTC and the other outfits involved. Marginal costs is a huge portion of any business model, requiring so many units to break even and each unit there after deducts significantly from profits and visa versa. A slowdown also increases the losses from financing.
The question I have had about tech is how many times can they turn over new models before the broad business becomes a commodity? Iphones sell when they are new. What happens when the market is saturated? DELL was hot stuff when desk tops were becoming obsolete as fast as they came out. The home market could run on upgraded 5 year or older stuff in a lot of cases today. I am wondering when they are coming out with a phone that instantly becomes a porta potty in an emergency? It appears to me the money in that business is going to be building bandwidth to run these gadgets. This cyclical tail chasing by the phone companies is going to be tough business.