3Com's China Card

I had breakfast this morning with Scott Hilton and Mike Leo of 3Com, who steadfastly refused to tell what's going to happen when the company reconvenes its shareholders' meeting this Friday to figure out whether and how to go ahead with the private equity buyout of 3Com (assuming they can go ahead). But we did discuss 3Com's global strategy, which will continue to be very China-centric regardless of whether the U.S. government freezes Huawei out of the 3Com deal.

I had breakfast this morning with Scott Hilton and Mike Leo of 3Com, who steadfastly refused to tell what's going to happen when the company reconvenes its shareholders' meeting this Friday to figure out whether and how to go ahead with the private equity buyout of 3Com (assuming they can go ahead). But we did discuss 3Com's global strategy, which will continue to be very China-centric regardless of whether the U.S. government freezes Huawei out of the 3Com deal.3Com is in the tier of vendors that, from the perspective of the North American voice market, clings to single-digit market shares, according to Allan Sulkin. That sometimes tempts people in our voice end of the business and our part of the world to dismiss 3Com.

Scott Hilton, who's 3Com's VP for Enterprise Products, emphasized the fact that 3Com has a diversified product line (voice and data) and a global customer base--with China being the most important part of that base. Scott pointed out that Enterprise Products is a $400 million a year business for 3Com, of which just 30% comes from the U.S. and 70% comes from the rest of the world--though 3Com's voice product portfolio sales are more heavily skewed to North America.

But Scott Hilton and Mike Leo insist that this diversity insulates 3Com from the U.S. economic slump as well as from the vagaries of competing against the big voice players. And as unpopular as Huawei may be with U.S. bigshots, they're clearly the right folks to have on your side when you fight for the enormous China market.

Scott described the three pieces of 3Com's go-to-market strategy in China, which is built on 3Com's 2006 buyout of the H-3C joint venture between 3Com and Huawei: