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

To: Scrapps who wrote (17938)	12/9/1998 9:07:00 AM
From: DMaA	Read Replies (2) \| Respond to of 22053

December 9, 1998 Siemens, 3Com to Form Joint Venture For Computer-Based Office Telephones By LEE GOMES Staff Reporter of THE WALL STREET JOURNAL 3Com Corp. and Siemens AG of Germany are forming a $100 million joint venture to develop products for the burgeoning market for computer-based office telephones. The joint undertaking, being announced Wednesday, will have its own board, with equal representation from the resurgent San Jose, Calif., computer networking supplier and the German electronics giant. The name of the new company and its headquarters have yet to be determined. Company Profile: 3Com Currently, most office telephones run on their own "PBX," or private-branch-exchange systems, which make up an annual market valued at as much as $15 billion. But computer networks are growing in capabilities and are expected to soon begin carrying voice traffic in addition to computer data. As such, networking companies are scrambling to develop PBX replacement products that will run over computer networks. Networking industry leader Cisco Systems Inc., for example, has bought several small companies to help it enter the market. Many observers expect all PBX systems to be replaced by computer networks within a decade. 3Com is roughly a third the size of Cisco in sales, and at roughly $16 billion, less then a fifth in terms of market capitalization. But 3Com's chief executive, Eric Benhamou, said the new partnership with Siemens showed how 3Com could compete in important new markets against larger companies like Cisco while still remaining independent. In an interview Tuesday, Mr. Benhamou repeated his intentions to keep 3Com independent, saying the company's long-term value is far greater than whatever premium an acquirer might currently pay. "I'd be sued [by shareholders] for the rest of my life," he said, were he to sell the company right now. Mr. Benhamou said the Siemens joint venture will produce products for sale by next year, although he said he didn't expect the revenue from the venture to reach significant levels until 2000. He said the partnership will be useful to 3Com in the computer-telephone market as well as in the company's core business of selling traditional computer networking gear. While still far off its near $80 high of two years ago, 3Com's stock has been on a run in recent months, nearly doubling since summer. Investors apparently believe that the troubles associated with 3Com's 1997 acquisition of U.S. Robotics are behind it. In Nasdaq Stock Market trading Tuesday, 3Com closed at $43.375, down 87.5 cents.