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Nortel seeks to solidify market position after resolving internal problems

Over the past few weeks Nortel Networks has definitely been in the news. It could be an attempt by Nortel to solidify its market position after having some internal issues over the past few years.

Nortel's problems started when the Internet bubble (1999-2000) broke and their sales dropped by 50%.  By the beginning of 2003, Nortel had cut its workforce to one third of its original size.  That seemed to help until criminal and securities exchange investigations into Nortel's accounting practices began in 2004.  The most recent bad news for Nortel started during March of this year, when the US Securities and Exchange Commission as well as the Ontario Securities Commission started legal proceedings against several former senior executives. 

The first interesting announcement Nortel has made is that it plans to develop and sell its own set of 802.11n wireless products. This includes Ethernet switches that will work seamlessly in wired and wireless environments.

Nortel also plans to develop their own multiple radio 802.11a/b/g/n access points as well. Up until now Nortel depended on Trapeze Networks access point and wireless controllers. Not a bad choice by any means and should set a standard that Nortel will want to meet or exceed. Also the fact that Nortel is focusing on multiple radio access points is what most would consider a very smart hedge when considering 802.11n and the interim amendment proposals. This Network World article has all of the details.

Nortel is also reportedly interested in acquiring 3Com. This along with speculation that 3Com is actively looking at buyout options has people on Wall Street who watch IT companies paying attention. The analysts are reasoning that this acquisition would help Nortel gain in the enterprise and carrier VoIP sectors. It was also reported that Nortel has expressed interest in 3Com's "Services and Systems Integration" unit. The All About Nortel website has more details about the possible acquisition.

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