3Com has merged its network card and modem businesses into a single business unit dedicated to home networking, consumer broadband and wireless products.
The creation of the Personal Connectivity Business Unit (PCBU), announced Thursday, is part of an ongoing effort by 3Com to more tightly focus its business and in turn reverse its slack financial performance. The unit is expected to generate annual revenue of around $2.6 billion.
But the move will result in job losses for around 150 employees, mostly in the analogue modem business and the reassignment of a further 150 staff. 3Com said it will focus on cable and digital subscriber line (DSL), the technologies expected to rapidly replace analogue systems.
3Com's business looks more orderly following the creation of PCBU, the combination of its enterprise and carrier businesses into the new Network Systems Business Unit last month and its dramatic exit from storage area networking last month. (see Newswire 29 March)
3Com also has its somewhat out of place Palm Computing division making handheld computing devices.
"I've asked our management team to focus their businesses for growth," said 3Com chief executive Eric Benhamou, in a statement. 3Com will reallocate resources into new and emerging technologies which are the highest growth segments of the networking market, he said.
Analysts said the move was a logical way of tidying up 3Com's structure and while it would not solve all the company's problems, it would make it a more attractive acquisition target.
"In the grand picture of the world, I'm not sure it changes things that heavily," said Neil Rickard, research director of networking at the Gartner Group. "But I suppose you could say the cleaner structure would make it easier for someone to identify which bits they want and which are separable."
"This potentially makes it slightly more appealing to any acquisition or strategic partner," he said.
"The new unit reflects the convergence of technologies where there is a strong connection - between home networking and high speed access," he added.
Rickard said the pooled business units may result in combined analogue and digital products, such as digital signal processor (DSP) cards incorporating analogue modem, ISDN and DSL.
Speculation is rife that a telecoms equipment company may soon buy part or all of 3Com - one of the last networking equipment companies not to have merged with a telecoms vendor. Much of the focus has been on 3Com's existing telecoms partner Siemens, although no concrete evidence of an acquisition has surfaced to date.
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