back to article BIG trouble in BIG China: Cisco shares fall off a cliff as CEO warns of slump

Cisco's shares slumped ten per cent in after-hours trading on Wednesday after the networking kingpin copped to terrible performance in emerging markets. The hardware giant squeezed $2.9bn in net income (up 11.6 per cent year on year) out of revenues of $12.1bn (up 1.8 per cent) in the third quarter of 2013. The company beat …


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  1. Matt Bryant Silver badge

    Bad strategy to blame.

    CISCO had the wrong strategy for China. What they should have done was one of two choices:

    1) Sold their kit in China at a giveaway price that even the locals couldn't copy it for, weather the loss by using some of the massive margins they have charged the rest of the World for years, and when all the Chinese competitors have died simply ramp the prices in China back up slowly.

    2) Paid bribes to the right Chinese government ministers, given them franchise rights and employed their idiot children as "consultants".

  2. IT Worker

    end of csco

    Facebook's Open Compute Switches + Software-Defined networking will be the end of Cisco as we know it. A new era is upon us where bloated vendors can no longer sell their overpriced gear. This is probably as good as it will get for CIsco as switches are their cash cow and that cow will be slaughtered on the altar of Software-Defined Networking. Does not matter what Chambers does, Cisco cannot be successful, it's like going against the tide. At mega-scale (where IT providing is going) nobody buys overpriced custom made hardware. Look at Google, Facebook, Amazon. These are Tier 1. Service providers are Tier 2 and they will be next down the SDN path. Cisco's model is unsustainable.

    1. Duncan Macdonald Silver badge

      Re: end of csco -agreed

      Cisco have become the Oracle of networking and like Oracle faced with open databases, Cisco is faced with open networking products. The high premiums that Cisco charges for its products will no longer be sustainable as the products from lower tier suppliers become good enough. Unlike Oracle, Cisco does not have much of a lockin caused by other products dependant on Cisco's products as network switches and routers by their very nature have to talk to competitors products. Can Cisco survive when the profit margins on its products fall to the under 10% level?

  3. Kurt 4

    The only thing good about cisco is meraki. They've already started jacking up meraki's prices lets hope they don't totally destroy them.

    1. Anonymous Coward
      Anonymous Coward

      Ahhh is that the one were you buy the kit and if you don't cough up a usage fee that cost pretty much the same price as the kit, year on year, your network shuts down?

  4. Soni

    New time new thinking

    Collaboration with workable competitors is what needed. Nobody wins all nowadays just look at Google!

  5. RonWheeler


    Massively overpriced buggy kit, poor compliance with networking standards, a sneering arrogant attitude, an emphasis on the nasty dated IOS over any sort of modern management tools. Confused why people are leaving.

  6. Roo

    I doubt that the stories about the NSA working with vendors to establish backdoors would have helped their sales in China much either.

  7. Chimp

    Possibly that ban on Chinese products wasn't clever..

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