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3Com, Other Firms Create Analog Modem Spin-off

3Com Corp. turned back the clock Wednesday, teaming with Accton Technology Corp. and NatSteel Electronics to finalize the spin-off of a dial-up modem firm.

Called U.S. Robotics, which was the name of the modem firm bought three years ago, the new firm will assume 3Com's dial-up modem product lines and business, including U.S. Robotics and U.S. Robotics Courier branded modems. The decision to create the new company came as part of a restructuring plan announced March 20.

With the analog modem business as its foundation, U.S. Robotics will identify new ways to build on the brand strength and product quality and will develop and market a spectrum of Internet access solutions to suit consumer, SOHO and corporate customers.

To fortify the startup, almost 250 3Com employees in engineering, marketing, sales and support will transfer from 3Com to U.S. Robotics. U.S. Robotics will have its own board of directors including members from 3Com, Accton and NatSteel. The firm will be headquartered in the Chicago area and will commence full operations by Sept. 2.

Citing market forecasts that predict volume growth in dial-up modems despite the seige of DSL access, Accton Vice President and U.S. Robotics board member Paul Kim said forming an independent entity was a good move.

"U.S. Robotics has been structured to take advantage of strong existing revenue streams, while leveraging new channels and business models to improve margins and foster innovation," said Kim.

Additionally, 3Com sold its Illinois-based manufacturing operations to NatSteel. NatSteel will continue to manufacture broadband modems and carrier-based, multi-services access platform equipment for 3Com. A definitive agreement between the two companies will be completed soon.

Taiwan-based Accton Technology is a leading provider of networking equipment. NatSteel Electronics, of Singapore, is an electronic contract manufacturer.

3Com hopes to make a comeback from the slow revenue growth it experienced while plying its trade in the networking sector. The firm spun off handheld provider Palm Inc. and restructured its targets to win over consumers and carriers.