I don’t run across too many blogs looking at Nortel so it was eye-catching to see a post entitled “Nortel Goes Into Spiral of Death”, which cites a some recent analyst downgrades. Here’s an excerpt that gets to the heart of the issue:
“Nortel is in a downward spiral. As it closes down or sells off whole sectors of product lines, its turnover will decrease faster than it can grow the other lines. The opportunity to ‘cross sell’ diminishes as the number of sales people decreases and Nortel needs to exploit those opportunities fast – the whole market is currently slowing down.”
Interesting – Nortel does seem to be like a headless chicken. Surely after five years they can get their accounts right.
I personally think that part of the problem was that Nortel didn’t embrace open standards quick enough. It’s Meridian switches were good and ahead of their time – but they dropped the ball on VoIP.
Nortel will certainly find it hard to turn the ship around fast. They should have bought D-Link and established a consumer presence as well.
As for takeover – well – who’d buy a company that looks like it’s run by the Mafia !!
Anonymous
I have the same thought that they should have bought D-Link … actually NetGear is rumoured to be a spinoff from Nortel. However, this does not fly very high with senior mgmt who think its useless to get into this space.
Anonymous
also … analysts can only write and suggest things that sounds so easy. damned if you and damned if you don’t. if product lines were not sold these same analysts would say the corp is too bulky and big and moving ahead on inertia with a rant on how our profits are diminished trying to do everything. when you start shedding baggage product lines, then these same people say its bad for business, going to diminish profits etc etc and predict the same worst case scenarios.
The corp is looking at focusing to get its business shaped up. so think this is a good move before poor margins kill it and the rest of us with it.
Nortel’s “Spiral of Death”?
I don’t run across too many blogs looking at Nortel so it was eye-catching to see a post entitled “Nortel Goes Into Spiral of Death”, which cites a some recent analyst downgrades. Here’s an excerpt that gets to the heart of the issue: