Rumor can become truth
If repeated often enough.
Someone on this thread questioned the synergy betwixt Intel and 3Com. What a sylly question! Once the union is consummated it'll be a climactic penetration of the 2 forces: yin and yang, wham and bang. Intel has always wanted to occupy the inside, that's why the slogan "Intel Inside", 3Com has always wanted the edges, i.e. "3Com Outside".
The strategy will be Intel making the innards of all computers and 3Com making the outtards: the metal boxes, the containers. Modem, NIC, Palm manufacturing will be transferred to Intel, while 3Com will specialize in packaging: paper boxes, shrink wrapping, etc. If this ain't synergy, the questioner ought to relearn physics.
Latest Rumor On Wall Street Has Intel Eying Networking Firm 3Com
Dow Jones Online News, Wednesday, August 12, 1998 at 18:29
NEW YORK -(Dow Jones)- Shares of computer-networking equipment maker
3Com Corp. advanced Wednesday on far-fetched rumors that semiconductor
giant Intel Corp. might be interested in a takeover but analysts had
doubts.
Shares of 3Com (COMS) rose $2.625, or 9.6%, to settle at $30 on
Nasdaq volume of 13.6 million shares. Average daily trading volume is
7.5 million. Shares of Intel (INTC) rose settled little changed at
$85.625. The two stocks were the most heavily traded Nasdaq issues
Wednesday. Both firms are based in Santa Clara, Calif.
Analysts, however, believe a combination is unlikely and question
whether the two firms would make a good fit. Intel's core business is
chips, though it also sells networking equipment.
Among other things, Intel makes adapter cards for computer networks,
a core business for 3Com. In fact price-cutting on the cards by Intel
has at times hurt 3Com. The cards are installed in computers to enable
the machines to communicate over networks.
3Com last year acquired modem maker U.S. Robotics Corp. and also
makes the popular PalmPilot line of hand-held computers.
What makes the rumor more interesting is the belief by some analysts
that Intel is trying to "siliconize" the networking market - or make it
more like the semiconductor market that it dominates. 3Com's challenge
has been to keep finding ways to differentiate its adapter cards and
other gear to keep them from becoming a commodity.
Market watchers say Intel wants to surround PCs in small businesses
and corporate workgroups with low-cost, high-power connections. In such
an environment, Intel and other chip makers would have an advantage
because the only way to increase capacity and still cut costs is to use
advanced silicon technology.
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved.
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