The pendulum has swung all the way in the other direction, making router sales much tougher. And Cisco has struggled to crack the optical routing and switching market where Nortel, Lucent Technology, and Alcatel are duking it out against a handful of nimble upstarts. Cisco's strategy in this arena was to buy smaller companies with competitive technologies. Finally, Cisco faces brutal competition in two areas that it had hoped would provide the strongest growth. Juniper offers better products at lower prices, analysts say, and Cisco has yet to react with a comparable product.
Cisco obviously disagrees.
Still, let' s not forget that Cisco remains a profitable company. Furthermore, Cisco's recently maligned acquisition strategy, which used highly valued stock in lieu of cash, hasn't hurt the company's balance sheet in the slightest. At the same time, the unparalleled customer-service culture that Chambers created will continue to make Cisco the default choice for corporations when they do go looking to build or upgrade internal computer networks. Demand will come back. Right now, it has hit a speed bump.