3Com indicated its plans while reporting weak results for its third fiscal quarter. The abandoned internet appliance line featured both the Audrey, which debuted last October, and the Kerbango, an Internet radio product obtained in 3Com's $80 million acquisition of Kerbango Inc. last June. Both products will be discontinued this coming June, though 3Com said it will continue to make home-networking products.

The Audrey's short shelf life reinforces growing unease over Internet appliances, once seen as the next great wave of computing. "I have always been skeptical about the Internet appliance space," said Nathan Brookwood, president of market research firm Insight64 (Saratoga, Calif.). "The people pioneering it are trying to figure out what works, but so far nobody's been able to hit a home-run with them. It's not clear that there is an Internet appliance space"

3Com is not alone in its reassessment. Gateway Inc. recently said it would rethink its plans to introduce a wireless, portable device that would access the Internet, much like its Touch Pad product, which resembles the Audrey. Internet appliance startup NetPliance Inc. said late last year that it would discontinue its flagship I-opener Web terminal, and startup PhotoTablet Inc. said last November that it would abandon its digital photo album device to concentrate on digital photography software.

3Com said it will focus on its core strengths, rather than on unproven markets. "Despite these cuts, 3Com will continue to invest in products and markets where it can lead," said Bruce Claflin, president and chief executive officer. "We are an early leader in wireless solutions, IP telephony and Gigabit Ethernet, with strong positions in the carrier and commercial markets. We intend to build on these strengths going forward."

Overall, 3Com hopes to save $1 billion by the end of the coming fiscal year. In addition to shutting down its Internet appliance division, 3Com hinted at broad layoffs to come and at the streamlining of its broadband modem business. The company expects to spread restructuring and nonrecurring costs over the next two-to-four fiscal quarters to support the streamlining activities.

In the third quarter ended March 2, 3Com's revenues of $629.6 million were 18 percent lower than the prior quarter's $766.7 million. The pro forma operating loss for the quarter was $222.8 million, and the pro forma net loss was $122.8 million.