Wednesday, February 1, 2006

3Com Acquires Majority Ownership of Huawei-3Com Joint Venture

3Com has purchased from Huawei an additional two percent interest in Huawei-3Com, Ltd. (H-3C), a China-based joint venture formed by 3Com and Huawei in November 2003. The sale was completed on January 27, 2006 following final approval from the government of the People's Republic of China, resulting in 3Com owning 51 percent of the joint venture and Huawei owning the remaining 49 percent.

"When the joint venture was formed in 2003, we had three key objectives: First, to establish a substantial presence in China, the world's fastest growing market; second, to create a resource capable of building enterprise-class, cutting-edge switching and routing products faster than we could deliver on our own; and third, to capitalize on a rapidly growing pool of engineering talent," said Scott Murray, president and CEO of 3Com. "We are extremely pleased with Huawei-3Com's performance, and its potential for continued growth."

According to industry research firm, IDC's Q3 2005 APAC LAN tracker, H-3C currently holds 31 percent share of the Chinese LAN switch market. Additionally, in its most recent financial earnings announcement, 3Com reported that during its calendar third quarter ended September 30, 2005, Huawei-3Com revenue was $111 million, an increase of 69 percent over the same period in the prior year. Gross margin for the quarter was 42 percent.

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