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from today's light reading.....Cisco Takes a Dip

Cisco Systems Inc. (Nasdaq: CSCO) is losing ground in its fight to hold onto the IP core routing market, according to preliminary second-quarter market share numbers from The Dell'Oro Group.

After owning about 80 percent market share for the past year, Dell'Oro reports that Cisco lost six percentage points, slipping to 74 percent market share, in Q2. Who's picking up the slack? Juniper Networks Inc. (Nasdaq: JNPR), which increased its market share from 17.3 percent last quarter to 23.6 percent this quarter.

I would say that because Cisco is so dramatically losing market share in its key market segment that its competitive advantage period (CAP) will soon be discounted by analysts. If this happens, its market capitalization may be in for a big reduction. (The Fault Line talks abuot tech companies whose dominance is no longer assured taking overnight hits of 50% reduction in market cap.)

If I recall correctly, one shouldn't sell a Gorilla until such time as the Gorilla's dominance is no longer certain, and there is a clear possiblility that a competitor will dominate a Gorilla market.

Is now the time to diversify Cisco holdings -- for example by shifting 50% of Cisco funds into Juniper? Any thoughts?

Cheers, David

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