I've seen this posted on several other threads, but not here. It sounds like Eric is seeing the wisdom of selling off some pieces. It's also a tacit admission that buying US Robotics was a disastrous strategic decision. What's unclear is what Eric believes are mature, and what he considers emerging markets. I'm guessing, but I believe that Eric's conviction is that NICs are an important growing segment, despite all the data to the contrary. He probably believes analog modems are mature/dying. But what can he get any value for? No one is interested in paying money for the analog modem business. IMO, what Eric is talking about here is just letting the mature businesses die on the vine. That means we get nothing for them, and we lose all the money that was invested in them.
Doughboy.
Benhamou said 3Com currently has too much revenue coming from mature businesses.
The firm derives 45 percent of its sales from older niches, like networking cards, and
another 45 percent from existing growth
businesses, like network switching. Yet only 10 percent of the company's revenue
comes from emerging opportunities, the
chief executive said. Looking ahead, Benhamou said he wanted 3Com's so-called
mature products to account for only 25
percent of revenues.
At stake here is the future of 3Com, which was once thought to be a toe-to-toe
competitor to industry titans like Cisco
Systems, the Bay Networks arm of Nortel Networks, and Cabletron Systems. As
Cisco got bigger and Bay got bought, 3Com
just tread water, seemingly unsure of which direction to go.
While 3Com's rivals jump into the telecommunications equipment fray, the company is
focusing on the consumer market as it
attempts to shed its mature businesses in favor of emerging opportunities. |
