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.