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

To: Doughboy who wrote (28153)	2/17/1999 7:47:00 PM
From: ED_L	Respond to of 45548

Thanks for the insight. You just explained to me the problem with my overall portfolio (have 22 different stocks in it). Same thing happens. When I get a few winners they are offset by losers. Overall performance ends up being negative.

To: Doughboy who wrote (28153)	2/17/1999 7:57:00 PM
From: Erin	Respond to of 45548

You say sell the consumer stuff off, and go head to head with Cisco. But the consumer stuff brings 3Com deals. The BellSouth deal you mention was for ADSL head-end and consumer gear. This business (like cable head-ends/modems) is the logical extension of the analog modem business, leveraging the same brain-power, brands and distribution channels. Sell the modem business and you lose the growth opportunities of xDSL, Cable, etc. Going head to head with Cisco is also not a nice prospect. Right now 3Com can correctly claim that their business can only be partially compared with Cisco. Go head-to-head and the marketplace comparisons will be very difficult, 3Com will drop from having the cachet of the "First-rate, No 2 networking player" to being the "Second-rate, No 6 networking company, one among many also-rans." DougHboy: If I had my druthers, I would also sell off the consumer modem segment and the NICs business [...] occasionally [3Com] can land a big fish like BellSouth.

To: Doughboy who wrote (28153)	2/17/1999 8:37:00 PM
From: Erin	Respond to of 45548

DougHboy: NICs, modems, and Palm are all demand-constrained, and their market segments' growth rates are flattening--if not shrinking during a recession. OK, NICs is not a high-growth market. Granted. But the modem opportunities beyond analog modems are high-growth: xDSL, Cable. And since 3Com has the breadth to offer both ends of the connection: office premises and consumer, they get many of the intial deals in the market (witness BellSouth), therefore gaining first-mover advantage and building up large market share in these high-growth markets. Palm's growth rate at 100%+ can afford to flatten a little and still be stellar IMHO. The whole Palm phenomenon and its possible extensions is something that quite possibly we haven't even begun to see the potential of. 3Com would be crazy to sell this, the revenue potential is enormous. DougHboy: If you need any more sign that 3Com has too many pots on the fire, it is the fact that in three of its business lines it faces three of the fiercest competitors in technology today: vs. Microsoft in handheld, vs. Intel in NICs, and vs. Cisco in networking. It cannot hope to defend all these flanks at the same time. Microsoft in Handheld Well, when Palm entered the PDA market Microsoft had already tried numerous times to gain a foothold there (remember PenWindows?) so you might think that Microsoft would have had a headstart or, at the very least, have had many mistakes to learn from... But no, Palm reinvented the market, stole the Apple Newton business and catapulted themselves into market leading position. Microsoft is trying to play catch up and despite (or, peversely, perhaps because of) their alliance of disparate and competing hardware partners, they have been unable to make much of a dent in Palm's share. Palm has the technical lead, the Internet edge (with the Palm VII in beta), and the user's mindshare. The latter is the most important: I met a non-techie insurance salesman yesterday who got a Palm for Xmas after throwing away his previous Casio (non WinCE) handheld. He is a real evangelist for the device and tells everyone he knows about how great it is. I have never met a WinCE user (apart from Microsoft employees) with the same level of enthusiasm. So I would say that Palm is currently handily beating Microsoft in the handheld space. Intel in NICs Intel's glorious assault on the NIC space and their early 1997 price-cutting that saw us nosedive from $80 turned out to have the effect of reinforcing 3Com's market share. Intel have their own battles to fight these days on the Processor front and I am sure that is where they are putting their resources. From a technical point of view Intel follows 3Com's lead and innovations in the spaces where they compete (NICs, Small Business networking solutions). 3Com is top dog here and Intel is nipping at 3Com's heels. I don't see that this competition is onerous for 3Com. Cisco in Networking Yes, 3Com can definitely hurt here if they go head to head with Cisco. But if they choose their battles carefully (and I believe we both agree here) they can have some good gains: e.g., Layer-3 Switching, Small Business and Home Networking.