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

To: Mehrdad Arya who wrote (36762)	12/3/1999 1:43:00 AM
From: gfr fan	Respond to of 45548

MA - my comments <<I am certain the router market will be an area they will focus on after the spin-off>> A little late for this - 4-5 years ago CSCO had 50% share -COMS could have made a full force run, instead they dipped a toe in the water - now CSCO has 81% share. In COMS defense, they do have very good routing code, but the R&D$$$ haven't gone into this space to buff out the product- they went into NICs, modems, and stackables - stuff that has been commoditized. Routers aren't going away, and those that own the routers have it a whole lot easier scooping up all other pieces of business. CSCO faces a threat in routers in the carrier space from Juniper, etc., but not to date in the enterprise space. <<but since then they have dropped out of competing directly with Cisco. If I am wrong please feel free to correct me.>> Ok, I will. Every enterprise deal comes down to account control. Whoever owns the WAN backbone has a huge leg up - guess who that is. So if an enterprise networking company doesn't go after the WAN they will die. CS chose this strategy, and they are dead. Bay took their eye off the WAN, and they died in the enterprise. FORE never had it on the WAN, and they died. If COMS is going to win in the enterprise space at above market rates, they need a strong WAN story, including L3. They still have a shot at the small and medium size markets - maybe this is their strategy. <<The results are manifested in their repertoire of patents and products currently on the market>> COMS has always held the most networking patents - but to date it hasn't translated into market share or growth. They also have had a strong product portfolio in the past - again w/o market share growth. Once PALM is gone they have to grow - this is the challenge. <<Wireless and Broadband are growing exponentially, hence, they should be looked upon from a growth perspective not current revenues.>> Agreed, however what does COMS tell the street about the other $5B+ in revenues? The current ramp of broadband and wireless, while strong, doesn't offset single digit systems growth. COMS will have to demonstrate sustainable growth in all markets they hold on to. There are bright spots, and they do/will have the cash to do something interesting. But the real bang on this stock comes from PALM spinning off and then the potential acquisition of the remainder.