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

To: Mehrdad Arya who wrote (36757)	12/2/1999 1:59:00 PM
From: gfr fan	Read Replies (1) \| Respond to of 45548

<<Coms has never really competed on a major level in the router market.......Why don't we ask ourselves what % of 3Com's revenues are generated from ROUTERS>> MA - you're wrong, sorry. COMS had at one time the best routing code, after buying Bridge - they didn't exploit this, EB has admitted this. Second, COMS' enterprise group fiercely competes for router deals, and they do have some large prestigious accounts, but the product pipeline has pretty much dried up. The lack of router share is an achilles heel - routers are extremely high margin, and more importantly this one product in particular pulls along most other pieces of the enterprise and carrier (to a lesser extent) purchases. This explains why CSCO is growing at 30%+ yoy - they own the most complex piece of the puzzle (routers) and that has allowed them to become #1 in other areas - switches, remote access, etc. The challenge that COMS has is to develop and keep lead in their emerging markets - VOIP, LAN telephony, wireless, but my assessment is that they will not be able to keep pace with CSCO in the VOIP and LAN telephony areas but they may in wireless and the broadband CPE side. However, wireless and broadband are less than 10% of total revenues, and broadband CPE will be viewed as a commodity. So, COMS after Palm, will have to probably acquire some high growth businesses or be acquired - otherwise the current company w/o Palm will be growing at single digit or low double digit rates as a whole for the next 4-6 quarters. Long COMS, but believe the price run up to come will be due to Palm spinning off and improved cash flow from operations.

To: Mehrdad Arya who wrote (36757)	12/2/1999 3:14:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 45548

Mehrdad, Not sure why you take these things so personally. I posted an article that shows COMS losing market share in routers. To say that COMS doesn't care is, I believe wrong. When COMS spins-off PALM routers will be a portion of their business and well... it should be. Routing is a small percentage of COMS business but I so is PALM. You wouldn't say that PALM losing it's #1 market share position isn't important if that were to happen... you wouldn't say that it's only 10% of COMS business... would you? Paint the picutre anyway that serves your purpose but you should pull your head out the sand and look around. A couple of additional thoughts regarding your comparisons to CSCO... for whatever reason you feel the need to compare COMS to CSCO all the time... not sure why.. but just to clarify. 1. Patents don't sell products. 2. PE of Cisco is high but add back in cost of acquisition and CSCO's PE is something like 80...still high but not out of control 3. Brand recognition - Yes COMS sells to consumers - Cisco does not. One would expect COMS to have better recognition - when did you ever see a Cisco product on the retail shelf. This is low margin business and Cisco has been shrewd to realize it and simply enable that market. 4. Global Reach -??? COMS wins??? Why? How? 5. Diversity - ??? COMS winw??? Why? How? 6. Value - If you mean stock price I agree COMS is a better value play. If you mean product...there is little product overlap so I'm not certain what you mean here. 7. Wireless... this is new game and COMS is not a leader. 8. Broadband - COMS is the leader.. What on god's green earth are you smoking? 9. Future - awesome for CSCO and very promising for PALM. COMS - the jury is still out... and if they keep giving up market share they will go bye bye. 10. PALM - Cisco envious? I think they couldn't care less. They will build infrastructure products which stimulate demand PALM. Cisco loves PALM - it puts more people on the net... PALM Gooood. Cisco would never build a product like PALM - again - short term very good - long term it's a CE device - read Low margin high volume. OG