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3Com Spinning Off US Robotics

Posted by ryuzaki0 on from the restructuruing dept.

DaveHowe writes, "According to the 3com press release they are spinning off their US Robotics modem line into a new company, shared jointly between them, Accton and NatSteel Electronics. It is also farming off its LAN router customers to Extreme Networks but will be keeping support for them as part of a "strategic alliance". " Hmmm...perhaps they had such a nice team with the PalmPilot IPO that they figure, hey why not do it with everything?

8 of 74 comments (clear)

  1. Read Elsewhere by Hrunting · · Score: 3

    I read elsewhere that this is part of a broader strategy by 3Com to manage themselves for future changes in the hi-tech industry. Basically, USR and Palm function better as independent companies. The modem/low-end connection market has become pretty much saturated and the growth that allowed USR to become such a well-known and successful company has subsided, leaving 3Com with what amounts to a stable and non-developing subsidiary. This is bad for a company in the hi-tech arena because the market changes so fast that if you aren't growing, you're dying. The Palm spin-off was a different story, as 3Com wasn't getting anything from Palm that they needed for their projected focus, mainly ISP services, equipment, etc.

    One can poke fun at the business model (buy a company, then spin it off), but it was just bad timing by 3Com. They picked up USR when it was at the top of the peak and now they're letting it go. It's good they recognize the harm in keeping it, because that will maybe allow them to survive. Same goes with Palm, because managing Palm took resources away from other areas they need to concentrate on. I wouldn't be surprised if they created another company or completely separate subdivision to manage their home product line either (cards, small hubs, etc.) as that market's growth is slowing down, too (supposedly, I'm no expert; just reporting what I remember reading).

    With the way that Internet business world is shaping up, though, who can tell what will happen?

  2. Re:History Repeats itself by SgtPepper · · Score: 3

    can't wait for aoltimewarner.com

    You know, i couldn't resist, sure 'nuf, it's a site...aoltimewarner.com Coming soon... The World's First Media and Communications Company for the Internet Age

    Gotta love it ;)

  3. Highly unlikely. by Gideon · · Score: 3

    As a (soon-to-be-former) 3Com employee and part-time Linux geek, I think that 3Com going open-source is pretty damn unlikely. Alliance with Microsoft is much more in line with the current company bulletins here.

    The idea of 3Com having monopoly power is, frankly, laughable. If there is a monopoly in the world of netwrecking, it is held by Cisco and their high-end routers (although I'm not trying to sling mud here; merely stating the obvious).

    The atmosphere here today in the UK is *weird*, though; there's metaphorical blood all over the walls, as they appear to be trying to get rid of the entire customer support department - their strategy appears to be to make everything so point-and-drool that even a moron can operate it and use this as an excuse not to have anything more than a vestigial customer support service.

  4. In other news: by FascDot+Killed+My+Pr · · Score: 3

    Compaq decides to spin of it's Unix/Alpha development: Going to call the new company "Digital Equipment Corporation".

    What we really have to watch out for is when Microsoft decides to spin off all the companies *they've* acquired--with all those companies spinning merrily away someone could lose an eye.
    --

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  5. 3Com a has been--already? by dmccarty · · Score: 3
    In a way, it's sad to watch 3Com struggle against mighty Cisco and newcomer Nortel. For someone like me whose childhood introduction to computers began in the mid-80's, 3Com has been like an IBM: always there.

    I wouldn't count them out, though. CEO Eric Benhamou is a very smart guy and if 3Com is shedding some extra weight, they must also have something good planned ahead. Too bad for 3Com that they bought U.S. Robotics right as the market for analog modems peaked out at 56K. Palm was really the only feather in their cap, and they did the honorable thing to let it go before their own decline affected it.

    As a side note, a Dell computer I just bought has its official "3Com 56K" modem listed as a U.S. Robotics modem. Go figure.

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  6. History Repeats itself by e-matt · · Score: 3

    So 3com which Purchases USR in 1997 is now (three years later) going to spin off USR into another company, it would seem to me this is display of the business cycle of life, or a good company (USR) that was bought by a biggeer company (3com) and was sucked into a business void in which business suffered so now they are going to break it out to increase profitability, It makes you wonder if companies are succeeding to fail. can't wait for aoltimewarner.com

  7. Clarifications by igjeff · · Score: 4

    Let me see if I can clarify a few misconceptions here...

    Extreme is getting 3Com's CoreBuilder line...this is very high end routers and switches.

    Motorola is get most of the PathBuilder and most of the NetBuilder lines (3Com will retain a few of the products in each of these lines). NetBuilders are the more traditional routers, PathBuilders are workgroup and specialty switches.

    NatSteel and Accton (sp?) get the modems, NetSteel also gets the manufacturing facility in the Chicago suburbs (nice facility...toured it in October) and will manufacture 3Com equipment under contract there. This facility manufactures all of the Total Control line of equipment I believe, as well as cable modems, and DSL modems (3Com only does CPE DSL modems at this point). I believe they also do whatever the Sportster line is called now at that facility, and probably a couple of other things I'm forgetting. :)

    The modems will be spun off into their own company called "USRobotics" (what goes around comes around) in conjunction with NatSteel and Accton. Its important to note that the purchase of USRobotics approximately 3 years ago included Palm, and the Total Control line...Palm, of course, is already spun off, and Total Control is being retained by 3Com, so this really isn't the same USRobotics from days or yore. Personally, I tend to think its better...more focused...USRobotics had trouble executing on the Total Control back then (we used the line back then even), focusing on only consumer analog modems may allow them to return to the quality of USRobotics modems that many of us remember from years gone by. I hope.

    So...now the question that a lot of people ask when they hear all this..."What does that leave?"

    Well...as I mentioned...Total Control, which is really a whole line of products and is aimed at Carriers and ISPs, is still gonna be there. I suspect the part of the PathBuilder line that they are keeping as well is being held on to in order to complement the Total Control.

    This also leaves home networking and small business networking (nics, ISDN routers, small hubs, etc.), I also suspect the part of the NetBuilder line that they are retaining will be there to complement this part of the business...the low end of the NetBuilders.

    The last part that is still there is the VOIP product lines and related products. The NBX 100 and 3Com's ethernet phones are supposed to be pretty nifty...though I haven't had a chance to try any out yet. A couple of the acquisitions that were announced were to beef up this area...unified messaging, etc.

    As a 3Com customer...particularly of the Total Control line...I see all of this as a very good thing. I do find it interesting though. When I think of what 3Com is...I think of NetBuilder and CoreBuilder...its almost like 3Com is selling off their identity and becoming a totally new company in the process. The new logo almost confirms this idea (note I'm *definitely* in the realm of my own personal opinion here, take it for what you will).

    I've always thought the Total Control line was the "ugly step-child" of 3Com...and now they seem like they want to make that the core of their business...I say more power to them! :)

    Any way you look at it, there are interesting days ahead.

    Jeff

  8. Isn't USR a dead company? by Randy+Rathbun · · Score: 4

    Same with Zoom, etc? Modems are going to be going away pretty fast over the next few years, and I would think that perhaps 3Com pretty much milked USR for everything they could. Sure, they are still making money for them, but how can a modem compete with DSL or Cable, or whatever new broadband service that is going to be showing up soon. It can't.

    It sounds to me like 3Com sees this (if they can't then they are pretty bloody stupid) and is now letting them float out there for someone to buy in the next few years.