3Com And Siemens Spearhead the Converged Voice-Data Enterprise Networking Market With Joint Venture.

SANTA CLARA, Calif. and MUNICH, Germany--(BUSINESS WIRE)-- Dec. 9, 1998--

Ethernet and Telecom Market Leaders Join Forces to Deliver

Industry's Richest Set of LAN Telephony Products;

Target $4-plus Billion Market by Year 2002

Ethernet data networking market leader 3Com Corporation (NASDAQ:COMS) and telecommunications market leader Siemens AG today announced their plans to form a joint venture to develop a rich set of LAN telephony and multimedia products that will change the way businesses build and operate their data and voice communications networks. Through the new joint venture, the two companies expect to deliver products in 1999 that will enable businesses to run voice, video and data calls over their local area networks (LANs) -- lowering their overall telecommunications costs and paving the way for new converged multimedia business applications. The companies are already working on joint development projects and intend to commence operation of the joint venture upon completion of definitive agreements early next year.

The joint venture, a significant step forward in the companies' 18-month strategic alliance, will accelerate and deepen their joint product development, broadening the range of solutions and markets they will address. To fund the joint venture, the two companies expect to share an equal initial investment valued at more than $100 million. This will enable both companies to establish themselves as early leaders in the emerging market for LAN telephony and related gateway products, which, according to analyst group Killen & Associates, will increase to over $4.1 billion by year 2002.

The joint venture will leverage the parent companies' unprecedented data networking and telephony market strength and expertise required for success in this emerging market:

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--   Siemens -- a leader in the worldwide telecommunications market;

--   3Com -- the leader in the worldwide Ethernet data networking
     market;

--   Siemens' call processing for rich telecommunications
     functionality and interworking software for compatibility with
     enterprises' existing telecommunications environments;

--   3Com's technology leadership in fully-switched, end-to-end data
     networking solutions, enterprise high availability networking
     solutions, and comprehensive support of industry standards for
     class of service (CoS), quality of service (QoS) and policy and
     network management.

--   Siemens' worldwide telecommunications sales and service channels
     and 3Com's worldwide data networking and service channels in 160
     countries.

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Expected products include a range of multimedia exchanges(1) for voice and data, LAN telephony gateways and Ethernet phones and adapters packaged and priced to meet the needs of small, medium and very large corporations. Initial applications for these products include voice-enhanced PC collaboration and conferencing, call centers for Internet-based retailers, and customer service help desks for a variety of industries, such as financial services, consumer product manufacturing, healthcare, government and education.

(1) For product definition, see related press release issued today, "Siemens and 3Com Outline Product Plans for Jointly Developed Converged Enterprise Networking Solutions."

The products will enable business users to make and receive telephone calls from their PCs or Ethernet phones from wherever they connect to a corporate network, share rich voice/video/data applications across the network in real time, and instantly retrieve data and multimedia files related to an incoming caller.

Convergence of voice and data over a single network is expected to offer businesses significant long-term savings over today's separate voice and data networks. Converged networks offer the cost efficiencies of one line for voice and data transmission as well as common equipment, management software and service/maintenance organizations.

Combining Forces for the Converged Networking Market

Siemens and 3Com will co-own the joint venture, which will have its headquarters in the United States, have its own staff and management, and development teams in California, Massachusetts, Germany, Israel and the United Kingdom. The joint venture management will report to a board of directors equally comprised of Siemens and 3Com executives. The initial staff will include more than 200 engineers from the parent companies, many of whom are already experienced in developing converged network products.

Products developed by the joint venture will be branded as the Siemens HiNet(TM) product line and the 3Com SuperStack(R) II and CoreBuilder(TM) product lines. The products will be sold by Siemens, 3Com and both parties'respective distribution partners. Both companies view their sales channels as complementary, with Siemens strength in direct sales, service and system integration, and 3Com's strength in indirect sales backed up with a growing portfolio of network design, implementation and post-sales customer services.

"The joint venture brings together the best-of-breed talent, experience, core technologies and distribution channels to create the industry's richest set of convergence products and deliver them worldwide ahead of our competitors," said Eric Benhamou, CEO and chairman of 3Com. "Converged networking is the most exciting and fundamental change in networking since the Internet itself. We will fully support customers so they can safely take the first steps into this new era and reap its competitive and cost-savings benefits. As of today, our long-standing partnership with Siemens and, consequently, our own competitive posture, has taken a significant step forward."

"Siemens will provide enterprise network customers with converged voice/data network solutions combining advanced LAN technology from the Ethernet market leader 3Com with benefits customers know and value from their PBX: feature-rich real-time communications and telco-class reliability," said Roland Koch, member of the board of Siemens AG and president of Siemens Information and Communication Networks Group.

"The leading-edge products expected from our joint venture with 3Com will significantly enhance the product portfolio utilized by Siemens sales and service organizations to provide customers with communication solutions combining best-in-class components from all leading vendors. Siemens contributions to the joint venture will protect our customers' investments by ensuring interoperability between the emerging multimedia networks and their PBX infrastructure," added Werner Schmuecking, member of the board of Siemens Information and Communication Networks Group.

See related press release issued today, "Siemens and 3Com Outline Product Plans for Jointly Developed Converged Enterprise Networking Solutions."

About Siemens' Information and Communication Networks Group

The Information and Communication Networks Group of Siemens with approximately 63,000 employees and a business volume of $14 billion (DM 23 billion), is one of the worldwide leading providers of end-to-end solutions for voice, data and mobile communication networks. The Group covers products/systems, solutions and service/support for the installation and maintenance of complete corporate and carrier networks. This includes services and consulting covering aspects from network planning and financial advice through to commissioning and user training. Siemens' Hicom is the worldwide leading private communications server and installed in approximately 120 countries. With more than 175 million line units in over 100 countries, Siemens' EWSD is the most successful digital switching system worldwide. For further information, visit Siemens' World Wide Web site atwww.siemens.com.

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. 3Com -- More connected(TM). For further information, visit 3Com's World Wide Web site at www.3com.com or the press site at www.3com.com/pressbox.

Legal Notice

The plans and terms for the joint venture expressed in this press release are currently being negotiated by 3Com Corporation and Siemens AG and are subject to change in the definitive agreements for the joint venture. Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of 1995: Certain of the comments and information in this news release are forward looking and involve risk and uncertainties that could significantly impact the results, including but not limited to, dependence on new technology and intellectual property, successful consummation of transactions in negotiation, dependence on the global communications, networking, consumer electronics and data storage industries, competition and pricing pressures; and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commissions. Formation of the joint venture is subject to all necessary corporate and governmental approvals.

Siemens is a registered trademark and HiNet is a trademark of Siemens AG.

3Com and SuperStack are registered trademarks and CoreBuilder and More connected are trademarks of 3Com Corporation. All other company and product names may be trademarks of their respective companies with which they are associated.