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Cisco's FY14 router gross margin will drop below its product gross margin average
Mon, 9/26/11 - 11:59pm    View comments

During his September 13, 2011 presentation at the 2011 Cisco Financial Analyst Conference, Cisco EVP and Chief Financial Officer - Frank Calderoni provided a 3-year forecast (FY11-FY14), for Cisco's product gross margin (GM) mix as shown in the below 2 slides:

Source: Cisco Systems

According to Calderoni, a (-) after a product category signifies a gross margin less than Cisco's product gross margin average.

While simultaneously, a (+) after a product category signifies a gross margin more than Cisco's product gross margin average.

Curiously (at least in my opinion), Calderoni failed to discuss why Cisco's forecast for its very important router gross margin went from a (+) in FY11 to a (-) in FY14, see below:

Source: Cisco Systems
 

View Frank Calderoni's entire 39-page presentation.
 

What's your take, why do you think Cisco forecast that its FY14 router gross margin will drop below its product gross margin average?

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