Cisco Quarter Pressured by HP Competition

Last quarter's weak outlook as well stoked concerns that Cisco may be losing market share to competitors. To boot to industry peers like Juniper Networks Inc, Alcatel-Lucent SA and Huawei Technologies Co Ltd [UL:HWT], HP is emerging as a tough competitor.

The two former resale partners have turned into rivals afterwards Cisco announced plans in 2009 to enter HP's territory of data center servers. HP in turn challenged Cisco by buying network equipment maker 3Com for around $3 billion.

Most analysts, but, said their main concern was whether Cisco could achieve its long-term target of growing revenue by around 12 to 17 percent each year.

The company has said it can grow

The company has said it can grow by entering new markets like data center servers, video conferencing and smart grid research. However investors said they would like more reassurance that these projects will shortly turn more profitable.

"They have new market opportunities which will likely result in tremendous growth over the at once decade. Nevertheless they're in the early innings ... and not but in a position to offset share losses in the more mature business lines," said Smith.

But he agreed with other investors who said Cisco was on the whole a solid, long-term investment, as its products were crucial to new technologies like mobile Internet and cloud computing.

"Are they challenged? Thoroughly. However outside of Apple and Google, we don't see a company in the research space in other words as then positioned for growth."

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