3Com Creates Personal Connectivity Business Unit for Increased Growth and Profitability; 3Com Increases Investment in Emerging Broadband, Wireless and Home Networking Markets
SANTA CLARA, Calif.--(BUSINESS WIRE)--April 15, 1999--3Com
Corporation (Nasdaq:COMS) announced today that it has created the
Personal Connectivity Business Unit (PCBU) to achieve three
objectives: faster growth, improved customer focus and higher
profitability.
First, PCBU is focused on growth and leveraging 3Com's strengths
in its NIC and modem products to achieve leadership in the growing
broadband, home networking, wireless and connectivity software
markets. Second, PCBU is aligned to better serve its channel and
end-user customers. Third, PCBU is structured to eliminate
redundancies in marketing and development, thereby reducing expenses
and increasing the profitability of its traditional NIC and modem
product lines.
"I've asked our management team to focus their businesses for
growth," said Eric Benhamou, 3Com chairman and chief executive
officer. "Reallocating resources into our portfolio of new and
emerging technologies will allow us to accelerate both our time to
market and leadership position in the highest growth segments of the
networking market."
3Com Applying Strengths to Growing Markets
3Com is the leading supplier of NICs and analog modems to the
enterprise, consumers and PC OEM customers. It has an unrivalled
portfolio of intellectual property, 'connectivity' expertise, channel
strength and brand equity. All of these will be applied to ensure
3Com's success in the broadband, home networking, wireless and
connectivity software markets.
-- 3Com believes it is uniquely qualified to migrate analog modem
users to DSL and cable technologies and be the leader in these
categories. 3Com is currently participating in DSL trials with
major carriers around the world and was awarded TCI's cable modem
contract for North America.
-- In the new home networking market, 3Com is the pre-eminent
company that combines expertise in all home networking and
broadband technologies. 3Com is creating a new generation of
integrated residential gateway products.
-- 3Com will leverage its leadership in the NIC and PC Card markets
to become a leader in the emerging wireless market and
connectivity software markets.
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PCBU Streamlines Processes and Resources for Increased
Profitability and Stronger Customer Focus
The new PCBU will consolidate and streamline its traditional NIC
and modem product lines, thereby more effectively aligning processes
and resources. Additionally, in recognition of the growing importance
of its PC OEM customers, 3Com has created a PC OEM organization
combining sales, marketing and engineering capabilities into a single
team.
To achieve the company's leadership and growth objectives, 3Com
will consolidate and reallocate staff in PCBU. There will be an
overall headcount reduction of approximately 150 employees, mostly
affecting those working on analog modem products. Approximately 150
additional employees will be transferred to jobs focused on high
growth product lines.
With approximately US$2.6B in annual revenue, the Personal
Connectivity Business Unit will report to Senior Vice President and
General Manager Jef Graham. "We've created our new organization to
better serve the entire range of our customers," said Graham. "3Com is
taking bold steps that will help all of its customers become 'more
connected.'"
The creation of PCBU compliments the formation of the Network
Systems Business Unit announced on March 15. Both units are designed
to address 3Com's commitment to improve operational efficiencies and
focus resources in growth markets. In the case of NSBU, these markets
include LAN and IP Telephony.
This press release includes forward-looking statements about
changes in 3Com's organizational structure and investments in various
lines of business such as broadband access (cable and xDSL), wireless
and home networking, and resulting benefits such as increased time to
market, faster growth, reduced expenses, and improved profitability;
and as such is subject to the risks and uncertainties including, but
not limited to, quarterly fluctuations in results, the timely
availability of new products, the impact of competitive products and
pricing, and the other risks detailed in the Company's SEC reports,
including 3Com's Form 10-K for the year ended May 31,1998 and Form
10-Q for the quarter ended February 26, 1999. Actual results may vary
materially.
About 3Com Corporation
With more than 200 million customers worldwide, 3Com Corporation
connects more people to information in more ways than any other
networking company. 3Com delivers innovative information access
products and network system solutions to large, medium and small
enterprises; carriers and network service providers; PC OEMs; and
consumers. 3Com -- More connected.(TM) For further information, visit
3Com's World Wide Web site at www.3com.com or the press site at
www.3com.com/pressbox.
CONTACT:
3Com Corporation
Leslie Davis, 408/326-7187 (Business Press)
leslie_davis@3com.com
Brian D. Johnson, 408/326-1962 (Trade Press)
brian_d_johnson@3com.com
Shirley Stacy, 408/326-6301 (Investor Relations)
shirley_stacy@3com.com
KEYWORD: CALIFORNIA
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