Pearse Flynn, the successor to the throne at Newbridge Networks following the resignation of former president Alan Lutz last week, has hit back at critics by promising better fortunes but admitted there is work to do.
Lutz was brought in to turn the company around, but resigned after Newbridge issued its sixth profit warning in 10 quarters, fuelling fresh takeover speculation. Flynn said he will fight to maintain independence and has promised to "dramatically refocus" Newbridge.
"I have to fix the sales organisation and our product portfolio - we have to shrink that," Flynn said. He would not specify which products will be phased out.
Newbridge will announce its strategy on 16 November. Flynn said he will reduce costs by moving to outsourced manufacturing. He also pointed to Newbridge's success in Europe, where turnover has risen 40 per cent in the past quarter, achieved by selling "bundled solutions" instead of concentrating on "boxes and technology".
Newbridge's ATM products for service providers are widely admired, but analysts have criticised the firm's failure to develop optical networking technologies and move into IP. Flynn said analysts have been "brainwashed" and said Newbridge's ATM switches are compatible with IP.
Craig Johnson, analyst at the Pita Group, said Newbridge made a big mistake when it sold its stake in optical manufacturer Cambrian Systems to Nortel.
Cisco recently spent billions to acquire such technology from Cerent.
The market has priced optical startups, such as Sycamore Networks, far beyond Newbridge's reach.
'Smaller firms may struggle to keep up with Microsoft's innovation with Dynamics' says CEO Stuart Fenton after acquiring assets from Profile Enterprise Solutions
Pete Peterson admits the firm hasn't always been the 'easiest company to do business with'
New chief exec Aaron Painter says 'longer-term strategy' could see firm tackle the Asian market
XMA bosses on becoming a 'performance VAR', pocketing £50m of Misco leftovers, and acquisition near-misses
Lee Hemani and Andy Wright reveal that XMA is aiming to boost net profits to three per cent of revenues as they run through the growth ambitions of the UK's ninth-largest reseller