3Com chairman Eric Benhamou will present his vision of a broader 3Com at the Networld+Interop show in Las Vegas this week, following its merger with US Robotics.
Benhamou told investment managers at the Hambrecht and Quist Technology Conference in San Francisco that 3Com will become the broadest player in networking, offering the first clues about which direction the combined company will take. Now US antitrust regulators have approved the deal, 3Com can begin discussing its strategy.
"It?s about creating a networking powerhouse to address end-to-end networking and connectivity needs," Benhamou said. "It?s about a $5.5 billion company, spending $443 million on R&D, with 12,000 employees." Intranets, Web-based business and Java will all drive networking demand, he said. "We want to change networking from pipes to intelligent transport."
Assuming shareholders approve the deal in June, Benhamou unveiled his agenda for 3Com?s growth. The company will base this on its enterprise, carrier, small business and consumer divisions, armed with "the right channels and products, and ownership of technologies is required", he said. It will use the broadest distribution in the industry, expand geographically, and combine 3Com?s Lan expertise and USR?s Wan experience to simplify connecting the two, he said. 3Com will also cut costs via economies of scale, lower tax demands and some combined offices.
Investor nerves made 3Com?s share price drop by over 25 per cent since it announced the $6.6 billion stock-based deal, which is now valued at $4.9 billion. 3Com shares were also damaged by competition in the network interface card (NIC) market from Intel, which has cut prices in recent weeks. "So far Wall Street has only seen the negative side. They [Intel] have been a competitor of ours for years, and each time we have beaten them down flat. Distributors say 3Com?s share in 10/100 fast Ethernet NICs has increased over Intel, despite their price cuts," Benhamou claimed.
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