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

To: gfr fan who wrote (11040)	12/1/1997 10:06:00 PM
From: craig crawford	Read Replies (1) \| Respond to of 45548

<< 1) what he thinks was COMS tactical error he mentioned in several posts back; >> I was referring to the 56K modem battles. USRX obviously got their 15 minutes of fame by cramming the channel full of modems. They appeared to gain market share at Ascend's expense but now we find out it was just a facade and USRX can't even give away their modems. They (USRX) only recorded $15.2 million in sales for the two months ended May 24th and they still have inventory problems! USRX's goal was to destroy competitors like Rockwell and Ascend and all they did was hurt everyone involved. (Except Cisco who didn't need to rely on remote access revenues to survive). Everyone who was rooting for second tier networkers like ASND, COMS, etc to effectively compete with C$CO saw everyone get set back. Now C$CO is running away from the pack. IMO opinion USRX was the major instigator of these battles and USRX "appeared" to go unscathed. COMS was yucking it up while ASND was in the dumps. Now COMS is getting a dose of it's own medicine and will suffer like the rest as a result. Serves them right...

To: gfr fan who wrote (11040)	12/1/1997 10:41:00 PM
From: craig crawford	Read Replies (2) \| Respond to of 45548

<< 2)how CSCO is kicking COMS now that it is down, and >> Not just C$CO. INTC and CPQ will kick them when they're down too. What do INTC/C$CO/CPQ all want? Market share. When is the best time to get it? When their competitors are struggling. Why wage a war when your competitors have good footing? You have to understand that due to operating efficiencies and sheer marketing muscle INTC can cut prices on NIC's anytime they want. It won't do squat to their bottom line. Won't hurt 'em a bit. Who will it hurt? Three guesses and the first two don't count. COMS derived 55% of it's revenue from modems and adapter cards last quarter. Until they shift to higher margin products this is going to be the bread and butter. INTC knows COMS is struggling right now and walking on thin ice. All they need to do is cut prices for a few months to make COMS really have a couple of bad quarters. The effect? COMS stock price will languish, their paper won't be good for making acquisitions, etc. and they will lose lot's of credibility with the street. Add to this serious competitve threats from C$CO (who is gaining market share across the board) and CPQ (who is really starting to get serious about networking) and what do you end up with? COMS getting flattened like a pancake. COMS can fend off INTC alone, C$CO alone, and CPQ alone, but when all three (plus a ticked off ASND) start closing in from all sides something has got to give. Don't even get me started about Asia. Asian problems aren't totally done with in my opinion (I think it will spread to Europe) and COMS derives 45% of it's sales from abroad. To make matters worse US sales grew 15% last quarter and international sales grew at 49%. International sales are where the growth is supposed to be for COMS. These are the one's in doubt.