Intel-3Com deal rumoured

The Wall Street rumour mill came up with a possible Intel-3Com merger yesterday on the somewhat flimsy grounds that Intel staff have been visiting 3Com HQ a lot recently. Between them Intel and 3Com have 70 per cent of the network interface card market, but although that could be seen as a justification for merger (aka Intel acquisition), it's also the reason it ain't going to happen. Intel currently faces a Federal Trading Commission antitrust suit, and the last thing it wants to do is increase its image as a monopoly by buying-up most of the NIC market. 3Com on the other hand has plenty problems, some of them related to the NIC market. It has too much in the way of commodity product, both NIC and modem, and its position is shaky at carrier-class level. But it might be able to fix some of these by working with Intel. Intel is better at, could even be said to be in love with, commodity NICs. It's also pushing hard into areas like cable TV and video, and there are clear synergies available from a deal of some kind. That means there are plenty of reasons for Intel to be talking to 3Com, but merger? No way. ®