Huawei-3Com JV to challenge Cisco
An ambitious joint venture to be formed by United States-based 3Com and China's giant Huawei Technologies might struggle to challenge industry leader Cisco Systems, according to industry watchers.
Last week, 3Com and Huawei announced a Hong Kong-headquartered joint venture that would manufacture local area network (LAN) routers, switches, voice over Internet protocol and other Internet solutions.
International Data Corp (IDC) analyst Rachel Lo said: 'Since Cisco is the dominating player [in Asia-Pacific], the success of this joint venture will obviously eat into Cisco's market share.
'But the overall impact will also depend on how successful it is in penetrating the high-end market.'
Gartner analyst Andrew Chetham said the joint venture was a boost for Huawei - one of China's largest telecommunications equipment producers - because it lacked overseas distribution channels.
Last year, unlisted Huawei reported overseas sales of US$552 million, representing 20 per cent of its profits, compared with 10.7 per cent a year earlier.
According to IDC, Cisco, 3Com and Huawei are the top three makers of LAN equipment - combining hub, network interface cards, LAN switches and routers - in China and the Asia-Pacific excluding Japan.
Cisco is involved in a legal suit against Huawei, claiming it copied Cisco product designs. Last week, it cited a former Huawei employee who claimed that even bugs were copied into the mainland firm's products.
