Cisco Gets Little From Video Conferencing

Trefis members say Cisco gets little upside from the sales of its video conferencing units.
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Cisco

(CSCO) - Get Report

has expanded its presence in video conferencing business with the acquisition of Tandberg, a Norway-based manufacturer of video conferencing systems, in April 2010.

Cisco competes with

Alcatel-Lucent

(ALU)

,

Sony

(SNE) - Get Report

and

Polycom

(PLCM)

in this segment.

We currently have a Trefis price estimate of around $26 for Cisco's stock, about 6% above the current market price of around $24.

Trefis members have created forecasts for two key drivers of Cisco's stock over the last week: (1) Price per Tandberg Video Conferencing Unit and (2) Tandberg Video Conferencing Units Sold.

The members' forecasts suggest that Price per Tandberg Video Conferencing Unit as well as Tandberg Video Conferencing Units Sold will trend above the Trefis estimate. These projections suggest a combined upside of around 1% for Cisco's stock.

We estimate that Video Conferencing accounts for around 2% of the $26 Trefis price estimate for Cisco's stock. Below are charts showing recent estimates created by Trefis members for the two drivers.

The average of forecasts for Price per Tandberg Video Conferencing Unit created by Trefis members indicated a projected increase from $8,772 in 2010 to around $10,664 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around $8,308 in 2010 to around $9,356 by the end of the Trefis forecast period.

The member estimates imply little upside to the Trefis price estimate for Cisco's stock. In the past, Price per Tandberg Video Conferencing Unit has increased from $7,000 in 2006 to $8,145 in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Cisco's stock to Price per Tandberg Video Conferencing Unit.

The average of forecasts for Tandberg Video Conferencing Units Sold created by Trefis members indicated a projected increase from around 81,590 in 2010 to around 112,067 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 70,662 in 2010 to 81,091 by the end of the Trefis forecast period.

The member estimates imply an upside of 1% to the Trefis price estimate for Cisco's stock. In the past, Tandberg Video Conferencing Units Sold has increased from 45,000 in 2006 to 67,297 in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Cisco's stock to Tandberg Video Conferencing Units Sold.

Our complete analysis for Cisco's stock is

here

.

Trefis

is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the U.S.