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$26.51 0.01 (0.04%)
5/16/2008 4:00 PM

Cisco Systems, Inc. (CSCO)

CAPS Rating:
*****

The Company designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry and provide services associated with these products and their use.

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Avatar zerozero3 (< 20) Submitted: 9/06/07 11:35 PM : Underperform Start Price: $31.40 CSCO Score: 12.97

Consumer line is having significant quality issues - this will lead to increased warranty costs.





I had a new Scientific Atlanta cable box installed over the weekend - the new "OCAP" version. The tech had four brand new machines on the truck - three FAILED to work - 75% failure of new machines is bad. The tech said that the cable company had been experiencing a lot of such problems lately with the new boxes.





With the quality issues in Scientific Atlanta and the quality issues in Netgear reported earlier - Cisco must clean house in their consumer/home market - it is more sensitive to quality issues than line of businesses (commercial) which often has "tech support" costs built into product lines.





Since quality issues appear systemic, I selected a 2-4 year timeframe; if senior management acts quickly, perhaps the impact will be less - BUT clearly warranty costs are going to be an issue this year and perhaps next year.





ZZ3

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