Cisco has become the most valuable company in Silicon Valley, overtaking Intel. The networking giant announced its results for its first quarter of fiscal year 2000 last Wednesday, and its stock market value rose to $278.3bn, ahead of Intel which stood at $274.3bn.
Cisco also announced the acquisition of wireless Lan developer Aironet Wireless Communications for $799m, and V-Bits, a developer of digital video processing systems for cable television, for $128m.
Rumours had been circulating that Cisco would not meet expectations because of a slowdown caused by year 2000 concerns, but with a sales increase of 49 per cent to $3.9bn and operating profit of $827m, these were unfounded.
John Chambers, chief executive of Cisco, said the US vendor will continue to lead the internet revolution.
US analysts said that the trend towards increasingly networked environments and the build-out of IP networks by service providers will see Cisco continue its growth.
Duncan Crook, managing director of networking services distributor Equinox, surprisingly predicted Cisco's fortunes will take a turn for the worse within the next two years. "It has been estimated that other carrier suppliers account for between 55 and 60 per cent of Cisco's business, either as customers, resellers or by influence. Now these vendors have their own IP switching products and that business is going to go away for Cisco," he said.
Martin Brampton, chief analyst at Bloor Research, added: "I think Cisco is going to see increasingly strong competition, particularly from Nortel, but it will certainly stand its ground."
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