3Com has performed a quick U-turn and cut the prices of its two key products in a direct response to Intel?s launch of low-cost hubs last week.
Chip giant Intel pushed further into the networking area after it announced plans to introduce a single-chip Fast Ethernet system aimed at the 10/100Mbps market. The hubs will have the options to upgrade 10Mbps to 100Mbps. The price for a 10Mbps port will be about $70.
At the time, 3Com executive vice president Doug Spreng claimed that there were no plans to cut prices on its stackable hubs. But 3Com later cut the price on its Fast Ethernet hub and 10/100 hub, making them about 10 per cent more expensive than Intel?s offering. One analyst estimated that 3Com?s hubs had been 35 per cent more expensive than Intel?s products. The company claimed the price was justified because it offered more features and more powerful software.
Analysts have expressed concern about the ferocity of the price war in the stackable hub market and as a result some companies have reduced their forecasts for 3Com?s earnings. This is the second time that 3Com has been forced to cut its prices in response to Intel introducing low-cost products over the past three months.
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