Fast Ethernet on the Motherboard is BAD!
I've read the Yahoo report about Intel wanting put its new single chip Fast Ethernet chip on PC motherboards, its own presumably plus others.
Well, we should be able to look and see what happens when Intel decides something should be on the motherboard. First, IDE and I/O went on, and I bet that didn't help the chipset makers. Now, I think there is one main on-board clock maker (Dallas) and a couple IDE controller people (Intel, CMD), and one or two serial/parallel types (SMC and NSM?).
We can also look and see what happened to Creative Labs (CREAF) when the Intel Atlantis motherboard put a sound chipset on the motherboard. CREAF has come back a lot lately, but I distinctly remember it being in the 5 range for a LONG time.
The bottom line is that a motherboard costs no more than $100. Only a fraction of that can be devoted to the Ethernet functionality, which is going to be just as common as parallel, serial and IDE, if Intel has its way. The days of the $100 NIC are over. This is very bad news for 3COM. It's a wonder they lasted this long, I guess.
If you don't believe this is going to happen, ask yourself what Intel is going to be doing with the plants that used to make 486's.
Unfortunately, I'm long this dog. I feel really bad for USRX shareholders who are drowning with this anchor tied around their necks. I see no reason to keep 3COM when it could be traded for USRX. If the merger goes forward, there's no loss. If USRX pays the $160 million, it will reclaim 30% of its market cap and head to 60.
Maybe someone who has more time would like to do a comparison of the above motherboard integration process.
Good luck,
Matt |
