3Com® Corporation Acquires Euphonics, Inc. Accelerates Move To
SANTA CLARA, CALIF. , December 4, 1998 -Continuing to drive the convergence of
audio, video and data communications, global networking leader 3Com Corporation (Nasdaq:
COMS) today announced it has acquired Boulder, Colorado-based EuPhonics, Inc. EuPhonics is
a leading developer of audio software that drives integrated circuits, sound cards,
consumer electronics and other hardware. Through this acquisition, 3Com will create a new
category of products that merges desktop and mobile modems and network interface cards
with sound capabilities to drive IP telephony, LAN telephony and streaming multimedia.
The transaction, valued at $8.3 million, includes cash for the outstanding shares,
assumption of EuPhonics employee stock options, and transaction costs, and will be
accounted for as a purchase. The charge for in-process technology associated with the
acquisition is not material and will be included in research and development expenses in
the second quarter of fiscal 1999. The remaining purchased technology and goodwill will be
amortized over a period of four years. The acquisition is not expected to materially
impact 3Com's fiscal 1999 results.
Audio: Critical Internet Medium
Audio is an increasingly important media type in our connected world. MP3-encoded
music, and speech and music streamed over the Internet, deliver information or
entertainment. Telecommunications - particularly voice over IP -- continues to be a
growing application for computers. The integration of the technology developed by
EuPhonics and 3Com is expected to improve the user experience, lower cost and simplify
3Com / EuPhonics: Driving Network Convergence
The acquisition of EuPhonics allows 3Com to drive the integration of PC-based
multimedia audio with 3Coms leading communications products. 3Com will now be able
to integrate audio and communications solutions for PC OEMs, consumers and every size of
enterprise beginning in Spring 1999.
"Acquiring EuPhonics world class audio expertise is a windfall for
3Com," said Bob Suffern, vice president of business development for 3Coms
personal communications division. "Adding EuPhonics audio expertise to
3Coms industry-leading modem and NIC products will speed the deployment of IP
telephone, LAN telephony and improve the networked multimedia experience."
Microsoft on 3Com and Euphonics
"Individually, 3Com and EuPhonics have both made significant contributions to the
Windows platform. 3Coms long history of working with Microsoft on modem technology
along with EuPhonics work to help us innovate the DirectSound and forthcoming
DirectMusic APIs bring extraordinary value to consumers who work, learn and play on
Windows-based platforms," said Aaron Higgins, technical evangelist at Microsoft Corp.
"Combined, we look forward to the great advances they will help bring to Windows
"EuPhonics is thrilled by 3Coms drive to integrate audio and
communications," said Jeff Barish, founder of EuPhonics, Inc. "EuPhonics
unparalleled audio assets and expertise will audio-enrich 3Coms branded, end-to-end
networking products. Job one for the EuPhonics team is the rapid integration of our
technology into 3Coms products. There are great opportunities to improve consumer
experiences over an IP connection and to rationalize the audio/comms subsystems of
Will Strauss of DSP market watcher Forward Concepts said, "It appears to be a
smart move by both parties. 3Com has already demonstrated the benefits of
field-upgradeable consumer products with their X2 to V.90 modem migration. The easy
upgrade of programmable DSP platforms appeals to OEMs as both a cost-saving technique as
well as a method of obsolescence-proofing their products." Strauss went on to say,
"EuPhonics has a unique audio IP portfolio which can be easily ported to the same DSP
platform that provides the PC connectivity for which 3Com is famous. Forward Concepts has
long extolled the benefits of DSP-based products of the type that 3Com can offer through
this acquisition, and it represents another step toward what will soon become the DSP
Convergence of modem and audio technology is demonstrated by the increased integration
into modems of telephony features such as telephone answering machines and full duplex
speakerphone capabilities. Another area of explosive growth is on-line gaming, which
requires both high quality audio as well as the fastest data communications solutions. The
integration of audio and communications can enhance all of these activities while lowering
the overall system and support costs to the PC OEM.
EuPhonics, Inc. is based in Boulder, Colorado and has 14 employees. It develops
software that drives the hardware of music synthesis industries. Founded in 1987,
EuPhonics licenses music synthesis and audio effects software to volume manufacturers of
integrated circuits, sound cards, computers, consumer electronics, and games. EuPhonics
has provided technology for industry leaders Analog Devices, Digidesign, Emu, Lexicon,
Roland, S3, VLSI Technologies, and Yamaha.
About 3Com Corporation
With more than 200 million customers worldwide, 3Com Corporation connects more people
to information in more ways than any other networking company. 3Com delivers innovative
information access products and network system solutions to large, medium and small
enterprises; carriers and network service providers; PC OEMs; and consumers.
3ComMore connected. For further information, visit 3Com's press site at www.3com.com/pressbox.