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

To: joe who wrote (21405)	9/11/1998 11:31:00 AM
From: Moonray	Read Replies (3) \| Respond to of 45548

RUMOR MILL: Reports that Intel might be interested in buying 3Com Corp. (Nasdaq, COMS) probably accounted for the 8 percent jump in 3Com's stock Thursday while the rest of the market suffered. The rumors are interesting and all, but there's a far more compelling reason 3Com ought to be surging. According to an impeccable source who's a student of the networking industry, 3Com has landed a coveted contract to provide so-called voice-over-IP equipment to AT&T Corp. (NYSE, T). The gear, part of 3Com's ''total control'' modem line for telephone carriers, allows companies like AT&T to transmit voice calls over data networks inexpensively using Internet protocol, or IP, technology. The deal is worth as much as $150 million in the next year, with potentially far more to come. That's a relatively small amount for now, but a huge vote of confidence in 3Com, considering the other two contenders were Cisco Systems Inc. (Nasdaq, CSCO) and former AT&T sibling Lucent Technologies Inc. (NYSE, LU) ''That's going to make people start to feel very comfortable with 1999,'' says the well connected source. Adds Randall Yuen, a portfolio manager with Salomon Brothers Asset Management Inc. in New York and a 3Com bull of late, ''This would be a great sign. Its sounds like one of the bigger voice-over-IP networks out there, and 3Com has been trying to make headway at this for a year.'' Spokeswomen for 3Com and AT&T declined to comment. 3Com's was one of the best-performing technology stocks Thursday, rising $1.94 to $27.31, on twice-average volume. A 3Com-Intel merger, by the way, isn't silly given that Intel is dead serious about networking. But it would reflect a huge turnabout for 3Com just a month after new president Bruce L. Claflin arrived. The two companies are bitter rivals in the market for network interface cards. And it was Intel that nearly scuttled 3Com's 1997 acquisition of U.S. Robotics Corp. (might that have been a favor?) by slashing NIC prices and zapping 3Com's profits. Bottom line: No one can ignore Intel, but there's no love lost between the microproccessor king and 3Com. sjmercury.com o~~~ O