After the flood; Tech firms and the downturn.(Bad news from Cisco and many of its peers shows that no corner of the technology industry is immune from the downturn)(Business)

Economist (US), The, April, 2001

JOHN CHAMBERS, chief executive of Cisco Systems, is known to choose his words carefully. So it was telling that, during a conference call on April 16th with Wall Street analysts to give a warning of sharply lower results, he described his company as the victim of a natural disaster. In the networking business, he said, the equivalent of a once-a-century flood would be a drop in sales of 10-15%. How, then, to describe the first full quarter of this year, when his company expects sales to fall by 30% over the previous quarter? "We never built models to anticipate something of this magnitude," Mr Chambers admitted.

His candour confirmed what industry analysts have been worrying about for some time. After an unprecedented boom, information-technology companies are...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.