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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (34934)	10/6/1999 8:14:00 PM
From: Captain Jack	Respond to of 45548

HHHmmmm --- <"how come they have pretty competitive broadband modems on the market?"> Seems I read T spent BILLIONS on those with another company I happen to have stock in that really went up,,, Thank you,, Face it-- coms is good,, not great,,, may get bought for a decent return soon,,, be happy

To: KyrosL who wrote (34934)	10/6/1999 8:39:00 PM
From: The Phoenix	Respond to of 45548

Kyros, I recall Eric making mention of reducing marketing and R&D efforts on "connectivity products" during the CC. He didn't specify which products he meant and I don't think it would be appropriate for me to make assumptions. Clearly you and I both agree that it would be ludicrous to reduce R&D and marketing on future growth technologies. Anyway.. I picked this up off the 3COM web site. These are Eric's words...I don't think these are from the cc however. Personal Connectivity Business Our Personal Connectivity business decreased from a year ago due to two major factors: First, average selling price (ASP) declines in both analog modems and network interface cards (NICs), only partially mitigated by increases in unit volume. This phenomenon is not new, and the declines are consistent with the dynamics I have been describing for the past few quarters in this part of our business. Second, reductions in channel inventory, consistent with our efforts to make supply chain management a competitive advantage for 3Com. Despite lower sales however, segment income percent held approximately at the same level as a year ago, while inventory came down 40%. This performance reflects our ability to reduce costs in pace with the rate of sales decline in these product lines. You gotta love that last point...yeah, we can reduce costs just has fast as the sales slow. Gee... that's something to be proud of. OG

To: KyrosL who wrote (34934)	10/6/1999 8:47:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 45548

Kyros, how come they have pretty competitive broadband modems on the market? I'm not going to beat this dead horse any longer but I'll try this one last time. CPE is a low margin highly competitive market. If COMS is looking to increase shareholder value they need to deliver products that will generate the kind of earnings and revenues that other companies in the infrastructure market are enjoying. Even the start-ups like ATON, JNPR, EXTR, and FDRY are worth as much as COMS...why? Because these are huge growth markets and they are markets where product differentiation can be pronounced. Now, if COMS were to buy MRVC that would improve value. I'd say CS..but do two bad companies make one good one???? I'm not sure... The point is that COMS is not going to be a $25B market cap company selling modems, NIC, hubs, and PALM's. They may enjoy decent margins in new markets (although unit sales will be slow) but margins will erode quickly. All COMS can do is hope that there is enough elasticity in the market to generate reasonable earnings. In the meantime they have to struggle to keep costs down which means less R&D spending than companies that don't have these same constraints. IMO it is not a long term sustainable model. Evenutally the Intels, Sony's, MOT's, and others who have far better economies of scale and lower costs (at transfer cost) will make COMS life unbearable... HEY! I know COMS could buy a foundry!!! OG