Eric Benhamou Quotations

We're focusing on markets where we have established a leadership position. We're transitioning out of businesses that are no longer strategic to 3Com's future.

This quarter's significant increase in revenue and improved results over last quarter reflect that we have gained traction in the marketplace and restored operational rigor.

So far we seem to be off to a very good start. Clearly the two companies have different cultures but these cultures are proving to be compatible.

Silicon Valley is a hotbed of innovation in wireless technologies. Establishing a ubiquitous network will enable the deployment of a new generation of broadband services for our entire community, including small businesses, schools, non-profits, and all the citizens of our region.

Under Bruce's leadership, 3Com developed a strategy to become a leading global provider of secure converged networking solutions for small, medium and large enterprises.

Palm executed quite well in a down market.

Over the quarter, our pro forma gross margins grew to nearly 35 percent, we generated positive cash flow from operations, and channel inventory remained within our desired range. And we have positioned the company to address broader market opportunities with innovative new products this fall and when the industry moves to a new growth phase.

Our seasonally weak third quarter was exacerbated by several factors.

While we remain optimistic about the long-term growth opportunities in the sector, we are disappointed that we will not meet our revenue and profitability goals this quarter.

We have a tightly focused strategy; we are growing again; and we believe we can execute our plans on time and within budget.

We're not in a position to give you specific information on that. I would encourage you not to look at the current quarter revenue because the mix of businesses this quarter reflects an unusual flow in and out ... all of these things affect revenue mix in a way that is completely unusual.

Our alliance with CAIS will make it easy for travelers to get access to the information they need while on the road.

Our alliance forms the basis to serve a substantially expanded user base by offering advanced network infrastructures for integrated data and multimedia services.

Balance sheet performance remained strong and improved during the quarter, enabling us to preserve gross margins despite the impact of seasonality and an unexpected slowdown in end-user demand in the North and Latin American enterprise markets.

As we enter fiscal 2000, rapid growth of emerging new businesses such as handheld computers and broadband access, coupled with success of our systems solutions, are transforming the growth profile of the company.

Tangible progress across virtually every aspect of our income statement and balance sheet gives us increased confidence in our ability to execute and to return to profitability.

The handheld industry has started to move into a more favorable period after a year of significant difficulties and overall shrinkage.