One point: Cisco never said they were directly taking marketshare from 3Com in the small business arena. Analysts deduced this from comments that Cisco was seeing strong growth in this market.
Also, 3Com was citing market share reports that only covered through December. 3Com's Q3 is Dec, Jan, Feb. Since Eric B. said in the cc that NIC/modem business declined more than systems, one could assume that 3Com will lose market share to Cisco based on early 1999 results.
So, overall, 3Com's announcement paints the broader picture of this company. The USRX acquisition tipped the scales towards way too much low-end, commodity business. Too much product mix is subject to pricing pressures. No strong high-end business means they are at the whim of channel inconsistencies. 3Com will continue to have surprises like this because the NIC, modem and low-end switching business will kill growth, and is too inconsistent.
If you 3Com investors want to invest in networkers, go with Cisco and Lucent, even at their current levels. 2-3 years from now, you'll be awfully glad you did. Only thing COMS may gave you longer term is a decent acquisition price.
|
