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2003 Top Ten: Heavy Findings: Page 3 of 5

One overarching result from HR’s market perception studies is that name recognition does not necessarily translate into a reputation for market leadership. Lucent Technologies Inc. (NYSE: LU), Storage Technology Corp. (StorageTek) (NYSE: STK), Sun Microsystems Inc. (Nasdaq: SUNW), and Telcordia Technologies Inc. are among the high-profile incumbent vendors that are losing their leadership edge, according to HR survey respondents.

No. 6: China is poised to have a huge impact on the telecom equipment market, but as a supplier rather than as a consumer.

Evidence is mounting that Huawei Technologies Co. Ltd. will be a huge force in the telecom hardware business, as will Huawei’s closest rival in China, ZTE Corp. Prospective customers already recognize Huawei as a supplier of low-cost products, according to HR’s 2003 Telecom Equipment Market Perception Study. In an upcoming HR report based on exclusive interviews and tours of Huawei’s and ZTE’s operations in China, Peter Heywood will explain exactly how the two companies plan to conquer the telecom equipment market – and why established vendors should be worried.

No. 5: Transport and packet networks will remain distinct entities in incumbent carrier networks for at least the next decade.

Vendors are clearly pushing ahead with product strategies aimed at converged networks, and carriers are clearly interested in the technology developments that will enable convergence. But in this case, the tail will not wag the dog, as HR Chief Technologist Geoff Bennett found in Setting a Course to Convergence: The Incumbents’ Wireline Strategies. Incumbent carriers still don’t see a driving need to sacrifice existing money-making services on the altar of convergence, no matter what they hear from suppliers. Those suppliers that run too far ahead of their customers are likely to run into a brick wall.