The Nortel Effect: Who Wins, Who Loses

Despite its much-publicized problems, however, Nortel's bankruptcy filing is unlikely to give the likes of Cisco any long-term advantage, according to Forrester's Hewing.

"I think that, at the end of the day, Nortel has a pretty loyal customer base, and I think they have good technology," he says.

What Nortel needs is time to sort out its sales, marketing and expense structure, according to the analyst.

"They have been using cash faster than they have been bringing it in, which has brought them to this juncture," explains Hewing. "Nortel needs some time to increase the length of the runway so that they can actually take off and get on a firm footing - I think that this protection is going to give them that."

Shares of Cisco continued Wednesday's retreat with the broader tech market, slipping another 2.4% to $15.36 from its closing price of $15.74. Motorola shares were inching up 1.7% to $4.18, and Alcatel-Lucent's shares were up 1% to $2.

Such is the scale of Nortel's business, however, that the firm's problems could potentially impact a slew of other tech companies. Electronics manufacturer Flextronics(FLEX Quote), for example, has a close relationship with the telecom equipment maker.

Flextronics, which provides electronics manufacturing services to the Canadian firm, said that it has been engaged in a Nortel risk mitigation for several months, in a statement released Wednesday.

This includes an agreement whereby Nortel has agreed to purchase $120 million of Flextronics' existing inventory by July 1st, 2009 and to make quarterly purchases of other inventory.