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

To: Milk who wrote (13776)	2/6/1998 10:52:00 AM
From: Mang Cheng	Respond to of 45548

"New Standard Approved for Modems, Raising Expectations of a Sales Jump " ---- By Frederick Rose Staff Reporter of The Wall Street Journal The International Telecommunications Union affirmed a standard for high-speed computer modems, unleashing analysts' projections for big sales growth in that market. The new standard, which is technically subject to a rubber-stamp international voting process, sets a series of detailed protocols for computer devices that transmit data over ordinary phone lines at close to 56,000 bits per second, or 56K in computer jargon. Shortly after the standard was approved early yesterday in Geneva by the telecommunications union, stock in 3Com Corp. started declining. Off as much as $2.8125 a share at midday, the issue closed down $2.125 a share at $32.6875 in Nasdaq Stock Market trading. 3Com has been a major participant in the so-called analogue modem market, with a share of a little under 30% in North America. For its part, the company said an influential analyst, once bullish on its stock, yesterday raised questions about inventory levels of its high-speed modems. Rockwell International Corp., the other major participant in the market through its production of computer chipsets for other makers' modems, saw its stock increase 81.25 cents a share to $57.75 in New York Stock Exchange composite trading. Analysts and market participants cheered the standard-setting. Dataquest Inc., a San Jose, Calif., research organization, estimates that manufacturers will ship 33 million so-called 56K modems this year, more than trebling the 10.8 million shipped last year. But problems remain, cautioned senior analyst Lisa Pelgrim, as manufacturers wring out problems in making one another's modems communicate, a process that might take two to three months. "It's going to be a little messy, but we go through this with all new standards," Ms. Pelgrim said. The telecommunications union decision removes "a dark cloud" over the market, said Neil Clemmons, vice president of marketing at 3Com. Mr. Clemons said 3Com plans to begin shipping product that meets the new standard "this quarter." The company also will be sending out new software that will enable its existing modems to meet the new standard. The market meanwhile has been struggling and will likely continue to confront razor-thin profit margins, said Jennifer Glickman, a hardware analyst at Associated Research Services Inc. in Irving, Texas. Margins for some modem manufacturers have narrowed to as little as 3% at the wholesale level through mail-order firms, Ms. Glickman said. interactive.wsj.com Mang