Tomahawk, WI 11/15/2013 (BasicsMedia) – Cisco Systems, Inc. (NASDAQ:CSCO)’s John Chambers issued a gloomy forecast for the current quarter and beyond. The CEO announced that his $114.82 billion market capped networking company was expecting to see a drop in its revenue collection by the end of this quarter (Q2.14). Chambers stated on Nov. 13, at a conference call soon after the release of Q1.14 data that he expected Cisco Systems, Inc. (NASDAQ:CSCO) revenue to decline by around 10%. This drop in revenue is expected to continue till mid of the next fiscal year. The CEO made these remarks following the CSCO’s disappointing figures in the previous quarter. The company reported decline in profits and just a marginal tick on its revenue column.

China has been CSCO’s promising market but a shift has occurred

Cisco Systems, Inc. (NASDAQ:CSCO) is a global networking equipment brand. The company has its equipment used by governments, big corporations, institutions and customers worldwide. The company’s promising market in recent times has been China where uptake of CSCO equipments has been more than satisfactory. Among the company’s emerging markets, China records the highest sales. However, China may not be what it has been for CSCO in the past several years where networking equipments are concerned. In fact, Cisco Systems, Inc. (NASDAQ:CSCO) and its management should focus energies and resources to other markets because Chinese economy has seen an adjustment that is not favorable for its business. Another reason why China may not be to CSCO what it was supposed to be in terms of a networking market is politics of Washington and Beijing.

Tech giants like CSCO could lose out in China because of economic slowdown

China is known to be the fastest growing economy in the world, presently it’s the worlds second largest economy, only second to the U.S. However, this growth is not fast enough to support the business of every player. The tech industry has witnessed increase of players lately and the competition has gone up. In this situation, big companies like Cisco Systems, Inc. (NASDAQ:CSCO) whose high-end products are typically priced high are facing competition from generic producers.

The debate of the U.S. spying on foreign governments and citizens is also a boiling pot that is likely scuttling the opportunities of U.S. firms in China and some other global markets. The cold war between Beijing and Washington which saw the U.S. government impose a ban on the purchase of telecoms equipment from Chinese firms ZTE and Huawei has the potential of risking CSCO’s business in China. It’s reported that one of CSCO’s big customers in China has started shifting its system from CSCO-based devices to devices provided by local firms. Due to this cold war, China’s telecoms equipment market might be radioactive for Cisco Systems, Inc. (NASDAQ:CSCO) and other U.S. firms for the next year or even two.

CSCO superior technology gives it an edge

Breaking into new markets outside China won’t be difficult for Cisco Systems, Inc. (NASDAQ:CSCO). The company already has a towering reputation in telecoms equipment market. Its devices are known for their superiority in terms of quality and longevity. Emerging markets like the Middle East, Asia, South America and Africa are still rich in opportunities for towering networking companies like CSCO. Now that China is becoming unresponsive, this is the time for Cisco Systems, Inc. (NASDAQ:CSCO) to push market boundaries so that it can make up for what it’s losing in China. In think if the company does this aggressively, its earnings could rebound sooner than forecasted.

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