Diversified technology conglomerate 3M Company (MMM) recently launched a new product portfolio of Passive Optical LAN Solutions (POLS) for the enterprise LAN (local area network). The new product portfolio will offer a complete line of state-of-the-art end-to-end fiber solution for LAN that would work as a viable alternative to the traditional copper-based Layer 2 Ethernet switches manufactured by leading players such as QLogic Corp. (QLGC) and Broadcom Corp. (BRCM).
An Ethernet switch typically operates as a LAN interconnection device at the data link layer. However, these switches require a lot of space for the infrastructure set-up and consume a lot of power. On the other hand, POLS require up to 70% less space for equipment and infrastructure and consumes about 80% less power, as it involves no active component for its fiber-to-the-desktop LAN technology. Consequently, it reduces operating costs with an estimated 90% less space and material requirements.
With such operational advantages, POLS is gradually gaining wide acceptance by large government and enterprise LAN customers. 3M aims to capitalize on this opportunity and has unveiled a portfolio of POLS products, including high-performance fiber cable, one pass fiber pathways, field terminated fiber connectors, wall and rackmount fiber distribution systems, optimized splitter modules and shelves. With over 50 years of experience in telecommunication equipment, 3M expects to optimize the POLS portfolio and subsequently extend its footprint in the market.
Formerly known as Minnesota Mining and Manufacturing Company, 3M was founded in 1902 and is currently based in St. Paul, Minnesota. The company operates as a diversified technology enterprise with manufacturing operations across 60 countries. It has more than 35 business units organized into six segments: Consumer and Office; Display and Graphics; Electro and Communications; Healthcare; Industrial and Transportation; and Safety, Security and Protection Services.
Leveraging its long-term strategy of accelerating investments in high-growth programs, 3M strives to deliver sustainable increases in sales, earnings and free cash flow. The company’s ability to convert high R&D spends into up cycle market share gains, pricing power, and margin determines its success over the years.
3M currently has a Zacks Rank #3 (Hold). However, we have a Zacks Rank #2 (Buy) for Tyco International Ltd. (TYC), one of the peers of 3M.
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