Archive for February 4th, 2009

Cisco dashes hope, forecasts 15% to 20% sales drop

Awful news from Cisco’s earnings report today, as CEO John Chambers said the economic downturn is spreading across the globe and is now “the biggest challenge of our lifetime.”

Sales are down 7.5% worldwide and 9% in the US and Canada. And the company is expecting next-quarter revenue to be down 15% to 20% year-over-year.

“The length of the downturn is still in question,” Chambers said during the conference call. “No one, including us, knows how long it will last. The majority of our customers are guessing 2010. A smaller group sees an upturn toward the end of 2009. With extremely large stimulus packages in all major countries, I tend to be a bit more optimistic.”

The good news? “In our opinion, the US will be the first major country to recover,” he said.

Alcatel-Lucent on Nortel

During Alcatel-Lucent’s earnings call today, an analyst tried to pin down CEO Ben Verwaayen on whether Alcatel-Lucent planned to take advantage of Nortel’s recent bankruptcy filing to buy up assets or lure away customers. Verwaayen’s answer:

“We have nothing but a great deal of respect for our competitors in the market,” Verwaayen said. “We have said, at the same time, we are not going to be have any big M&A plans going forward. … We’re going to execute our plans. We’re very excited about our plans. We’re very excited about the opportunity for ourselves to build and to grow from what we have. And all of the rest, I think, is quite interesting to consider for industry watchers. But for us, we’ll focus on the here and now.”

Though analyts are speculating Alcatel-Lucent might be one of the potential bidders for Nortel’s pieces, Verwaayen is implying that a big purchase of Nortel’s still developing 4G business or CDMA business would be out of the question, to say nothing of its mammoth metro Ethernet unit. As for poaching Nortel’s customers, Verwaayen says he doesn’t badmouth competitors. Of course, you don’t have to talk badly about competitors on conference calls if you want their business. You just have to talk badly about them to their customers.

Alcatel-Lucent’s Q4 conference call wasn’t terribly enlightening, though the Verwaayen did go into some detail about its new partnering and start-up strategy, which Telephony Senior Editor Ed Gubbins covers in his analysis today. The vendor saw sales decline in all of its divisions except two notable areas: IP/MPLS routing equipment and IMS. Alcatel-Lucent noted that IMS and next-generation network equipment revenues are now higher than TDM switching equipment revenues.

T-Mobile gets the Moto Renew, the greenest-green phone yet

One of the first to make good on the green promises carriers, vendors and handset manufacturers in the past year, T-Mobile today began offering Motorola’s recycled water bottle-made Renew handset for only $9.99 with a two-year service agreement. The Moto W233 Renew, which Moto says can deliver nine hours of talk time, will be an exclusive to T-Mobile customers for the first six months. The phone is completely recyclable and packaged with materials printed on 100% post-consumer recycled paper, along with a prepaid envelop for consumers to ship in their old device for recycling. more


February 2009
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