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Technology Stocks : 3Com Corporation (COMS)
COMS 0.001600.0%Jan 16 9:30 AM EST
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To: Sawtooth who wrote (39920)2/25/2000 8:48:00 PM
From: The Phoenix  Read Replies (1) of 45548
 
LOL! crystal ball.

I see COMS succeeding in Cable Modems and DSL Modems - selling gobs at low margins as the competition creeps in from everywhere. COMS may have market leadership position but will not be able to hold it.... The revenue gains from this product line will not be able to mask the bleeding in V.90 and Nic products.

The NBX will win some small enterprise and small business accounts however will not be able to crack the larger enterprises. Competitions from NT, LU, CSCO, and even MSFT will keep this from happening. NBX will see moderate growth for about 4-6 quarters then flatten and eventually go into a decline.

Router and switch business will continue to underperform.

TotalControl could end up being a winner but COMS has significant compeititon in CISCO. I'm not optimistic that COMS got the good to grow as fast as the market here and will certainly not be able to grow market share - espeically given all the start-ups squeezing that space.

COMS continues to show relatively good earnings but this is coming from investments - not operations and money managers are not going to throw much money at a company that can't grow core businesses at market rates - notwithstanding earnings coming from non-operations or from cost cutting.. fact is the market is attracted to Growth stocks - Not Value stocks and I think COMS may sink into a value play.

NOW... that all said.. if EB believe all this will in fact occur the question is will he be sharp enough to sell to Siemens or ERICY before they sink into oblivion.

Sorry to be so pessimistic. I do agree with Mehrdad that COMS is focused on broadband and this is where the big bucks are but they are focusing on the edge - high volume/low margin/highly competitive piece of the market. The name of the game going forward is wireless and optics. COMS has no optical play and their wireless strategy is edge focused (nothwithstanding the IWF.. which I believe will also see some competition in the very near future).

Of course these are my very negative and biased opinions. I'm going to hold 20%-30% of my position after IPO to see what COMS has to say for themselves at the next earnings report. The report may not be good since it's tradionally a rough quarter but the CC has to be incredibly upbeat... or I'll cash it in.

Good luck!
OG
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