Who can stop the Cisco express? In the recent quarter, the company produced a sales increase of 25% year-over-year and EPS was up 30%. With its purchase of Scientific Atlanta, that company now has a footprint for data and video deliver that runs from the router all the way into the living room. The company’s shares trade near $27. With the exception of a brief spike in 2004, the company’s shares have not traded this high at any point in the last five years. Smaller competitors like Juniper and Nortel have fallen hopelessly behind Cisco in their range of products and their revenue.Motorola does not seem to be paying attention. The company recently bought Netopia and is building its business in wireless modems and routers so that it can add IPTV capability to its products in the distribution of video, voice and data. Motorola has been strong in the cable service area since it bought cable set-top company General Instruments. Netopia gives it access to the DSL delivered television markets.With the phone companies focused on delivering more services to be competitive with their cable competition, Motorola is putting itself in the middle of that supply chain.Cisco may be able to push around smaller competitors like Juniper, but Motorola is a different matter.Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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