More: Siemens, 3Com to Form Computer-Based Phone Venture
Bloomberg - Dec 9, 1998 18:43 EST
Santa Clara, California, Dec. 9 (Bloomberg) -- 3Com Corp. and Siemens
AG said they're broadening their 17-month alliance with a $100 million
joint venture to develop products to link phones with office computer
networks.
The venture combines the expertise of Siemens, the largest German
engineering electronics company, with that of the world's No. 2
network-equipment maker. It will start with 200 engineers taken from
both companies and begin shipping products early next year. 3Com and
Siemens will each own half of the new company.
Networking companies see a potentially huge market for phones that,
when picked up, connect through an office computer network instead of
a phone company. Businesses could reduce costs by combining all their
voice, data and video communications on a single network and replacing
the private branch exchange, or PBX, system in as little as 10 years,
according to some forecasts. ''There's a general acceptance that
the world is moving towards IP,''or Internet Protocol, said
Lehman Brothers Inc. analyst Tim Luke. ''This combination
is quite powerful.''
3Com's biggest rival, Cisco Systems Inc., the No. 1 maker of network
equipment, has bought several companies to gain technology and prepare
it for the so-called convergence of voice and data on single networks.
Last week, it agreed to buy closely held PipeLinks Inc., which makes
devices that route data using IP, for $126 million.
The shares of Santa Clara, California-based 3Com rose 1/2 to 43 7/8.
Siemens rose 2.2 marks to 103.7 marks ($62.12) in Germany.
New Market
Siemens and 3Com said the potential market for products that put voice
and data on the same network will be as big as $4.1 billion in 2002,
citing a study by Killen & Associates. It said the combined size of the
individual voice-and data-networking markets is now $100 billion.
The joint venture will begin delivering a new switch to handle both
voice and data communications for office environments in the first
quarter. 3Com and Siemens also will begin selling products such as
digital phones, computer servers that run networks and call-processing
software that each company is already making.
Later next year and in 2000, the new company expects to ship Internet
phones and multimedia switches that separate voice, data and video on
networks. Developing will be done by teams in California and Massachusetts
and others in Germany, the U.K. and Israel. The products will bear the
3Com and Siemens names, rather than using a new brand.
Note to readers: This Tim Luke is NOT our Tim Luke. Our
Tim Luke is a day trader and is far too busy making money to
make pronouncements as to whether "the world is moving
towards IP" or not.
o~~~ O |
