Cisco's fighting an uphill battle to regain its mojo

Cisco (NASDAQ:CSCO) controls about two-thirds of the global router and switching market, but it's core technology is designed to make fixed path networks function seamlessly, in an environment that is rapidly trending toward mobile, something in which it has less expertise.

Plus, the company is used to seeing a 75 percent to 80 percent margin on its switching and router technology, which make up nearly two-thirds of its annual revenue. That's a problem when competitors are willing to cut their margins to 50 percent or less to make a sale.

The company has tumbled a long way from its heydays of the ‘90s when it was, with a market cap of $555.4 billion, the world's most valuable company.

Cisco, along with Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTL), is, said OptionMonster co-founder Jon Najarian, "where money goes to die-all three of those stocks."

Cisco CEO John Chambers has vowed to turn the company around, to refocus it on its core and profitable business. During the company's last earnings call he said he would cut $1 billion in expenses from the company by reducing the workforce--cuts analysts say could equate to some 5,000 jobs--and dump underperforming divisions and products.

The company already has killed outright its one-time darling, the Flip video camera, and cut 550 jobs. Rumors persist that other products, like Linksys, which is now part of its home networking business, and collaboration platform WebEx, are on the block.

But Chambers' hopes to increase revenues--the company reports more than $10 billion a quarter--is going to be a tough row to hoe. Money Morning said one reason is that Cisco, despite fitful efforts, has been unable to jump into the mobile computing segment with any authority and that inability may be its biggest missed opportunity .

For more:
- see this Money Morning article

Related articles:
Cisco puts WebEx VoIP collaboration on the iPad
Rumor: Cisco looking to sell WebEx, Linksys businesses
Cisco's Chambers vows to cut $1B in expenses, ax jobs
Cisco kills Flip video camera as part of consumer business remake
Cisco launches new UC solution for SMBs
Cisco buys Inlet Technologies for $95M to support Videoscape push
So, tell me, is Cisco really holding a fire sale? Why?