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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: Craig Schilling who wrote (13191)	2/28/1998 4:28:00 PM
From: Scrapps	Respond to of 22053

Craig, thanks for the IBD article link. Strong 25%-30% growth over the next year...sounds good. :o)

To: Craig Schilling who wrote (13191)	2/28/1998 5:24:00 PM
From: Xpiderman	Respond to of 22053

Thanks, Craig. Here is the full article you mentioned: 3Com To Thrive In 56K World, Benhamou Says Date: 3/2/98 Auithor: Michele Hostetler Now that the industry standard for 56K modem technology is on the books, 3Com Corp. plans to hit the remote-access networking market with force in '98. Santa Clara, Calif.-based 3Com purchased modem maker U.S. Robotics Inc. for $6.6 billion last summer to increase its push into this hot market. Modems are used to connect far-flung computer users to central networks. But the lack of a standard stymied the market last year, causing lackluster growth. Two opposing camps eventually reached an accord on Feb. 5 by combining two technologies. They called the resulting standard V.pcm. The new standard is expected to boost sales of access concentrators, which are banks of modems. The devices are considered key to the overall market for remote access, the linking of two distant networks. Eric Benhamou, 3Com's chief executive, recently discussed with IBD how the new standard will affect the networking industry. IBD: How has the new 56K modem standard changed the way 3Com does business? Benhamou: What this means is that I think this will basically enable the market to move to 56K. It sends a very reassuring signal to the enterprise community (large corporate accounts) that had really not jumped on the 56K bandwagon until they were assured the standard was going to be there. For 3Com specifically, it's excellent news because it will enable us to consolidate market-share gain in the 56K arena. It's been the most popular standard by a wide margin. We believe as the whole market moves more fully and more broadly to 56K with the V.pcm standard, (3Com) will end up in a stronger position than we had before. We have a different architectural approach to building modems than our competitors. We use DSP (digital signal processing) technology in all of our intellectual properties that are embodied in the code. This gives us great flexibility and time-to-market advantage. This is why we are expected to be the first company with V.pcm-standard product. IBD: How will you transition your customers to the new technology? Benhamou: We feel that we can basically move from the X2 level to the V.pcm level with relatively few changes in our code. It's a very painless migration. It's basically a free software upgrade. IBD: How will the new standard change the remote-access market? Benhamou: I'm not sure how much of an effect it will have on the remote-access market in terms of numbers of ports (connections). But certainly the types of ports that companies are deploying will change dramatically. Again, we feel as if we have a time-to-market advantage. The modems we have on the remote-access side are essentially the same as the modems we have on the subscriber side. Our larger (Internet service provider) customers will have the (new standard) modem technology in the next few days or weeks. I think this will set the pace for the upgrade in the entire industry. IBD: Last year, the remote-access market didn't grow as fast as expected. What's the outlook now? Benhamou: We think this market will continue to be a high-growth market. There has been a lowering of the growth this past year, primarily because the industry moved (to putting more modems in access concentrators) without really increasing prices very much. This means the price per (network connection) took a big dive. There was fairly rapid erosion last year. This year I don't expect to see that kind of dramatic price erosion, but there will be some. The market is strategic and hotly contested. We expect the remote-access market will probably grow in the 25%-to-30% range for the industry. Obviously we expect that we will benefit more than most from the V.pcm upgrades. We have an opportunity to grow faster than the marketplace. IBD: How do remote-access products help 3Com's push into large corporate accounts? Benhamou: A portion of the remote-access market is in the enterprise segment. For example, if you take 3Com as a company, we actually run our own remote-access program. Our telecommuters and our people who access our network from the field when we travel . . . all of this is done using a remote-access system we own and manage. Some companies choose to outsource it to an ISP or to a carrier. But we choose to do it ourselves, and there's a fair amount of companies that do that too. I would say 20% to 25% of the remote-access segment are basically enterprise customers and three-quarters or more are ISPs and carriers. Remote access is in fact an important aspect of enterprise business.