Chi-son:
3Com is having problems with unsold inventory in Far East.
Analysts forecast plunge in 3Com Asian revenue
by ERIC LAI and AGENCIES
Nov 18 1997 4:43AM CST, South China Morning Post
United States-based analysts say 3Com's Asian revenue may fall by up to a third amid slowing sales and a rising
inventory of unsold modems.
Two Wall Street analysts have slashed their quarterly earnings forecast for the company, citing the slower business
outlook.
A 3Com spokesman in Hong Kong acknowledged that recent currency and stock market crises would hurt sales.
"It will have an impact on performance this quarter," said Minnie Lee, marketing communications manager for 3Com Asia Pacific.
3Com specialises in making network adapter cards and modems for personal computers, with its US Robotics division holding about 22 per cent
of the modem market.
The company's inventory of modems might be 16 to 20 weeks of supply, about twice as high as 3Com's goal, said George Kelly, analyst at
Morgan Stanley Dean Witter.
Modem-makers, including 3Com, have been split over two competing standards for high-speed modems. The two camps, led by 3Com and
Rockwell International Corp, sell modems that do not work with each other.
The industry-wide split was causing consumer confusion and slowing sales, Mr Kelly said.
Bob Ingols, 3Com spokesman in the US, confirmed that its inventory levels were higher than normal. "It's a situation that we're addressing," Mr
Ingols said.
Ms Lee confirmed that sales of 33.6 Kbps modems were still higher than sales of its 56 Kbps modems.
"A reduction of perhaps one-third of previous revenue levels {from Asia} cannot be ruled out," Mr Kelly said.
3Com got about 15 per cent of its sales from Southeast Asian countries, which might face a recession, he said.
(Copyright 1997)
Kompai!!!
Fiberman hath spoken!
"There will be much constipation with no fiber" |
