______________________________________________________________


                               United States
                    Securities and Exchange Commission
                         Washington,  D. C.  20549



                                FORM 10-Q/A



        X   Quarterly report pursuant to section 13 or 15(d) of
            the securities exchange act of 1934


For the Quarterly Period Ended November 30, 1997  Commission File No. 0-12867

                                    or

          Transition report pursuant to section 13 or 15(d) of
                 the securities exchange act of 1934

           For the transition period from        to  
                               ____________  

                           3Com Corporation
          (Exact name of registrant as specified in its charter)

          Delaware                                    94-2605794
          (State or other jurisdiction of             (I.R.S. Employer
          incorporation or organization)              Identification No.)

          5400 Bayfront Plaza                         95052
          Santa Clara, California                     (Zip Code)
          (Address of principal executive offices)


Registrant's telephone number, including area code (408)764-5000

Former name, former address and former fiscal year, if changed 
since last report:  N/A

Indicate by check mark whether the Registrant (1) has filed 
all reports required to be filed by Section 13 or 15(d) of the 
Securities Exchange Act of 1934 during the preceding 12 months 
(or for such shorter period that the Registrant was required 
to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days. 
					
               Yes ....XX....          No ................

As of November 30, 1997, 354,562,107 shares of the 
Registrant's Common Stock were outstanding.

_______________________________________________________________


                            3Com Corporation

                            Table of Contents


PART I.	FINANCIAL INFORMATION

Item 1.		Financial Statements

		Consolidated Statements of Operations
                Three and Six Months Ended November 30, 1997 and 1996 

		Consolidated Balance Sheets
                November 30, 1997 and May 31, 1997     

		Consolidated Statements of Cash Flows
                Six Months Ended November 30, 1997 and 1996    

                Notes to Consolidated Financial Statements     

Item 2.		Management's Discussion and Analysis of Financial
                Condition and Results of Operations    


PART II.	OTHER INFORMATION

Item 1.         Legal Proceedings       

Item 2.         Changes in Securities   

Item 3.         Defaults Upon Senior Securities 

Item 4.		Submission of Matters to a Vote of Security 
                Holders 

Item 5.         Other Information       

Item 6.         Exhibits and Reports on Form 8-K        


Signatures              



3Com, AccessBuilder and U.S. Robotics are registered trademarks
of 3Com Corporation or its subsidiaries.  CoreBuilder, HiPer,
Palm, PalmPilot, Total Control, and x2 are trademarks of 3Com
Corporation or its subsidiaries.




PART I.   FINANCIAL INFORMATION


Item 1.	Financial Statements


                             3Com Corporation
                   Consolidated Statements of Operations
                        (As restated, see Note 2)
                   (In thousands, except per share data)
                               (Unaudited)

                               Three Months Ended       Six Months Ended 
                                   November 30,            November 30,
                               ------------------       ----------------
                                1997        1996        1997        1996
                                ----        ----        ----        ----

Sales                        $1,197,189  $1,459,939  $2,794,705  $2,771,443

Cost of sales                   645,344     756,916   1,476,773   1,450,509
                              ---------   ---------   ---------   ---------

Gross margin                    551,845     703,023   1,317,932   1,320,934
                              ---------   ---------   ---------   ---------

Operating expenses:
  Sales and marketing           338,334     253,160     640,712     475,637
  Research and development      144,978     113,328     287,776     211,381
  General and administrative     71,265      56,417     134,130     106,153
  Purchased in-process
    technology                       -           -           -       54,000
  Merger-related charges         (1,229)      6,600     268,558       6,600
                              ---------   ---------   ---------   ---------
    Total operating expenses    553,348     429,505   1,331,176     853,771
                              ---------   ---------   ---------   ---------

Operating income (loss)          (1,503)    273,518     (13,244)    467,163
Interest and other income,
  net                             7,637       3,532      10,598       5,810
                              ---------   ---------   ---------   ---------

Income (loss) before income
  taxes                           6,134     277,050      (2,646)    472,973
Income tax provision              2,113     102,452      44,566     193,331
                              ---------   ---------   ---------   ---------

Net income (loss)            $    4,021  $  174,598  $  (47,212) $  279,642
                              =========   =========   =========   =========

 
Net income (loss) per common					
  and equivalent share:
    Primary                  $     0.01  $     0.49  $    (0.13) $     0.79
    Fully diluted            $     0.01  $     0.49  $    (0.13) $     0.79

Shares used in computing
  per share amounts:
    Primary                     365,085     354,787     353,529     352,563
    Fully diluted               365,105     355,979     353,529     353,586

See notes to consolidated financial statements.




                            3Com Corporation
                       Consolidated Balance Sheets
                        (As restated, see Note 2)
                    (In thousands, except par value)
                               (Unaudited)

                                                  November 30,      May 31,
                                                      1997           1997
                                                      ----           ----
ASSETS	
Current assets:
  Cash and equivalents                             $  539,748     $  351,237
  Short-term investments                              596,062        538,706
  Accounts receivable, net                            908,401        996,080
  Inventories, net                                    635,972        513,740
  Deferred income taxes                               296,337        196,875
  Other                                               111,289         93,040
                                                    ---------      ---------
    Total current assets                            3,087,809      2,689,678

Property and equipment, net                           773,137        731,301
Deposits and other assets                             105,116        118,804
                                                    ---------      ---------

    Total assets                                   $3,966,062     $3,539,783
                                                    =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term debt                                  $  110,000     $  134,700
  Accounts payable                                    327,862        308,581
  Other accrued liabilities                           786,656        503,232
  Income taxes payable                                 73,156        168,942
                                                    ---------      ---------
    Total current liabilities                       1,297,674      1,115,455

Long-term obligations                                  46,717        170,652
Deferred income taxes                                  60,685         25,332

Stockholders' equity:
  Preferred stock, no par value,
    10,000 shares authorized;
    none outstanding                                       -              -
  Common stock, $.01 par value,
    990,000 shares authorized;
    shares outstanding: November 30, 1997:
    354,562; May 31, 1997:  334,944                 1,564,586      1,183,926
  Retained earnings                                 1,002,280      1,049,561
  Unrealized gain on investments, net                     536          2,320
  Unamortized restricted stock grants                  (4,912)        (5,165)
  Accumulated translation adjustments                  (1,504)        (2,298)
                                                    ---------      ---------
  
    Total stockholders' equity                      2,560,986      2,228,344
                                                    ---------      ---------

    Total liabilities and stockholders' equity     $3,966,062     $3,539,783
                                                    =========      =========


See notes to consolidated financial statements.




                              3Com Corporation
                   Consolidated Statements of Cash Flows
                         (As restated, see Note 2)
                          (Dollars in thousands)
                                (Unaudited)

                                                        Six Months Ended
                                                          November 30, 
                                                      1997           1996
                                                      ----           ----
	
Cash flows from operating activities:
  Net income (loss)                                $  (47,212)    $  279,642
  Adjustments to reconcile net income (loss)
    to net cash provided by operating activities:   
  Depreciation and amortization                       128,201         95,790
  Deferred income taxes                               (81,971)         8,471
  Pooling of interests:  OnStream                          -           4,850
                         U.S. Robotics                 15,052         29,195
  Purchased in-process technology                          -          54,000
  Merger-related charges                              268,558         (6,600)
  Changes in assets and liabilities,
    net of effects of acquisitions:
    Accounts receivable                                87,679       (405,581)
    Inventories                                      (173,432)        85,919
    Other current assets                              (22,010)       (24,894)
    Accounts payable                                   19,281         95,609
    Other accrued liabilities                         145,227         38,788
    Income taxes payable                               54,572        128,884
                                                    ---------      ---------

Net cash provided by operating activities             393,945        384,073

Cash flows from investing activities:
  Purchase of short-term investments                 (269,631)      (211,257)
  Proceeds from short-term investments                209,603        171,362
  Purchase of property and equipment                 (211,222)      (213,624)
  Business acquired in purchase transaction                -         (66,547)
  Other, net                                          (25,418)       (28,658)
                                                    ---------      ---------

Net cash used for investing activities               (296,668)      (348,724)
                                                    ---------      ---------

Cash flows from financing activities:
  Issuance of common stock                            234,110         53,782
  Repayments of short-term debt, notes payable
    and capital lease obligations                    (168,066)        (1,386)
  Repayments of long-term obligations                 (12,397)          (177)
  Net proceeds from issuance of debt                   33,300         50,000
  Other, net                                            4,287         (2,274)
                                                    ---------      ---------

Net cash provided by financing activities              91,234         99,945
                                                    ---------      ---------

Increase in cash and equivalents                      188,511        135,294
Cash and equivalents, beginning of period             351,237        233,573
                                                    ---------      ---------

Cash and equivalents, end of period                $  539,748     $  368,867
                                                    =========      =========

Non-cash financing and investing activities:
  Tax benefit on stock option transactions         $  131,351     $   70,104
  Unrealized gain (loss) on investments, net       $   (1,784)    $    1,923


See notes to consolidated financial statements.




                              3Com Corporation
                 Notes to Consolidated Financial Statements
                                 (Unaudited)


1.	Basis of Presentation

On June 12, 1997, 3Com Corporation (the Company) 
completed the merger with U.S. Robotics Corporation (U.S. 
Robotics), the leading supplier of products and systems 
for accessing information across the wide area network, 
including modems and remote access products.  This merger 
was accounted for as a pooling-of-interests.  The Company 
issued approximately 158 million shares of its common 
stock in exchange for all outstanding common stock of 
U.S. Robotics.  The Company also assumed and exchanged 
all options to purchase U.S. Robotics' stock for options 
to purchase approximately 31 million shares of the 
Company's common stock.  All financial data of the 
Company presented in this Form 10-Q/A have been restated 
to include the historical financial information of U.S. 
Robotics in accordance with generally accepted accounting 
principles and pursuant to Regulation S-X.

The unaudited consolidated financial statements have 
been prepared by the Company and include the accounts of 
the Company and its wholly-owned subsidiaries.  All 
significant intercompany balances and transactions have 
been eliminated.  In the opinion of management, these 
unaudited consolidated financial statements include all 
adjustments necessary for a fair presentation of the 
Company's financial position as of November 30, 1997, and 
the results of operations for the three and six months 
ended November 30, 1997 and 1996 and cash flows for the 
six months ended November 30, 1997 and 1996.

On June 1, 1997, the Company adopted a 52-53 week 
fiscal year ending on the Sunday nearest to May 31, which 
for fiscal 1998 will be May 31, 1998.  The Company does 
not expect this change to have a material impact on the 
Company's financial statements.  The results of 
operations for the three and six months ended November 
30, 1997 may not necessarily be indicative of the results 
to be expected for the fiscal year ending May 31, 1998.  
These financial statements should be read in conjunction 
with the consolidated financial statements and related 
notes thereto included in the Company's Annual Report on 
Form 10-K for the fiscal year ended May 31, 1997.


2.	Restatements

In response to a review by the staff of the Securities 
and Exchange Commission of the Company's Form 10-Q 
filings for the quarterly periods ended August 31, 1997 
and November 30, 1997, the Company is revising previously 
reported financial statements.  Specifically, and as 
discussed in detail below, the consolidated financial 
statements as of and for the year ended May 31, 1997, and 
as of and for the three and six months ended November 30, 
1997 and 1996 have been restated to (1) recombine the 
periods presented for fiscal 1997, (2) adjust the merger-
related charge recorded in the quarter ended August 31, 
1997, and (3) exclude the effect of conforming the two 
companies' fixed asset capitalization policies.


Recombination of Fiscal 1997
----------------------------

The Company is revising the methodology for presenting 
the combined historical financial results of 3Com and 
U.S. Robotics for fiscal 1997.  The Company had 
previously combined the 12-month period ended May 31, 
1997 for 3Com with the 12-month period ended March 30, 
1997 for U.S. Robotics.  This combining methodology 
resulted in U.S. Robotics' April and May 1997 operating 
results, a net loss of $160.3 million, being recorded as 
a decrease to the Company's retained earnings as of June 
1, 1997 rather than as a component of the fiscal 1997 
statement of operations.

The Company is now combining the fiscal year ended May 
31, 1997 for 3Com with the period from July 1, 1996 
through May 25, 1997 for U.S. Robotics.  This combining 
methodology includes the last three reported quarters of 
U.S. Robotics, ended September 29, 1996, December 29, 
1996, and March 30, 1997, and the months of April and May 
1997.  To reflect a complete 12-month year and a 3-month 
fourth quarter and thereby enhance comparability of 
periodic reported results, U.S. Robotics' results of 
operations for the month ended March 30, 1997 are 
included in both the three-month period ended March 30, 
1997 and the three-month period ended May 25, 1997.  
Consistent with U.S. Robotics' non-linear quarterly sales 
pattern, sales were relatively low in the first two 
months of each quarter and significantly higher in the 
third month of each quarter, which March 1997 represents.  
By using this method, the last month of a quarter is 
included in each of the four quarters for fiscal 1997.
The Company believes that there is no preferable practical
alternative to this combining method.  Nevertheless, this
method does double-count March 1997 results.  As discussed
more fully below, product returns in April and May 1997 were
higher than anticipated and resulted in an increase in the
provision for estimated product returns at May 25, 1997.  An
indeterminate amount of these returns were related to
March 1997 sales; however, the Company believes that this
amount is not significant to the combined results and that
inclusion of March 1997 in both the third and fourth
quarters of fiscal 1997 is appropriate.  3Com's balance sheet
as of May 31, 1997 was recombined with U.S. Robotics' balance
sheet as of May 25, 1997.  The U.S. Robotics' March 1997 net
income of $112.9 million was reflected once in the Company's
retained earnings at May 31, 1997.  The previously reported
and revised combining periods are as follows:


                                     Fiscal 1997 Quarterly Periods
                           -------------------------------------------------

                              Q1'97         Q2'97         Q3'97      Q4'97
                              -----         -----         -----      -----

3Com                       August`96     November`96   February`97  May`97
U.S. Robotics
  Previously reported      June`96       September`96  December`96  March`97
  As recombined            September`96  December`96   March`97     May`97*

*Three-month period which includes March, April, and May.


Supplemental Operating Information for U.S. Robotics
----------------------------------------------------

Following is supplemental information regarding  U.S. 
Robotics' results of operations for the three-month 
period ended May 25, 1997 (in thousands). Results for 
these periods exclude reclassifications made to conform 
to the Company's financial statement presentation.


                                                                   Three
                                         March     April/May    Months Ended
                                         1997         1997      May 25, 1997
                                         ----         ----      ------------

Sales                                 $  541,662   $   15,277    $  556,939
Gross margin                             279,411      (49,204)      230,207

Total operating expenses                  97,457      187,557       285,014
                                       ---------    ---------     ---------

Operating income (loss)                  181,954     (236,761)      (54,807)

Income (loss) before income taxes        179,647     (242,929)      (63,282)
Income tax provision (benefit)            66,720      (82,625)      (15,905)
                                       ---------    ---------     ---------

Net income (loss)                     $  112,927   $ (160,304)   $  (47,377)
                                       =========    =========     =========


U.S. Robotics' sales for the month ended March 30, 1997
(March 1997) were approximately $541.7 million, 
reflecting strong market demand worldwide for information 
access devices including the introduction and initial 
high volume shipments of products incorporating x2TM 
technology (x2 products).  x2 technology increases the 
potential speed for downloading data from 28.8 or 33.6 
Kilobits per second (Kbps) for standard V.34 modems to 56 
Kbps.   Consistent with U.S. Robotics' non-linear 
quarterly sales pattern, sales in the first two months of 
the quarter were relatively low and in the third month of 
the quarter, which March 1997 represents, were 
significantly higher.

Gross margin for March 1997 was approximately $279.4 
million, or 51.6 percent of sales. The overall gross 
margin reflected the initial high volume shipments of x2 
products, which generated higher gross margins due to U. 
S. Robotics' temporary "first to market" advantage over 
competitors in the 56 Kbps modem market.  Also, to a 
lesser extent, the overall gross margin reflected higher 
margins on the initial sales of newer generation handheld 
organizer products introduced during the month.

Total operating expenses for March 1997 were 
approximately $97.5 million, or 18.0 percent of sales.  
Sales and marketing expenses reflected significant 
spending related to the introduction of x2 products, 
other marketing programs designed to generate continuing 
growth in sales and expand market share, and continuing 
investments to increase the worldwide sales force with 
the intent of increasing sales of network systems 
products.  General and administrative expenses and 
research and development expenses reflected continuing 
investments in personnel and systems necessary to support 
U.S. Robotics' expanded level of business activity and 
its commitment to new product and technology development.  
As a percentage of sales, total operating expenses for 
March 1997 were low due to the non-linear sales pattern 
described above.

Gross sales for the two months ended May 25, 1997 were 
approximately $200.3 million.  Net sales after 
provisions, primarily for product returns of $143 million 
and price protection of $33 million, were approximately 
$15.3 million.  These results principally reflect the 
following factors:  U.S. Robotics' non-linear sales 
pattern, as described above; lower than anticipated sales 
out of the channel, due in part to confusion about the 
new 56 Kbps technologies and concerns regarding the 
absence of an industry standard for 56 Kbps modems; 
efforts to reduce levels of channel inventory, including 
increased emphasis on sales out of the channel via price 
reductions and other promotions; and product returns from 
channel partners whose sales out had been lower than 
anticipated.

Returns during the two months ended May 25, 1997 totaled
$82.3 million, reflecting primarily desktop modems and
remote access concentrators.  The majority of the desktop
modem returns consisted of older generation products which
were heavily impacted by the March 1997 introduction of
U.S. Robotics' 56 Kbps modem with x2 technology.   Returns
of remote access concentrators were due primarily to lower
than anticipated sales out of the distribution channel.
Based on negotiations with individual customers, U.S. Robotics
allowed returns during this period in excess of customers'
contractual rights due to the 56 Kbps technology transition
and the desire to reduce channel inventory.  Returns during
this period exceeded the March 30, 1997 balance in the
allowance for sales returns of $48.9 million by $33.4 million.

The price protection provision of $33 million related primarily
to price reductions effective subsequent to March 30, 1997
for desktop modems and remote access concentrator product
lines.

Gross margin for this period was affected adversely by 
the provision for price protection described above, a 
provision for potentially excess and obsolete inventory 
of approximately $15.4 million, and unabsorbed 
manufacturing costs.

Operating expenses for the two months ended May 25, 1997 
were approximately $187.6 million.  Sales and marketing 
expenses reflected significant spending related to the 
introduction of x2 products and newer generation handheld 
organizer products, other marketing programs designed to 
generate continuing growth in sales and expand market 
share, and continuing investments to increase the 
worldwide sales force with the intent of increasing sales 
of network systems products.  General and administrative 
expenses and research and development expenses reflected 
continuing investments in personnel and systems necessary 
to support U.S. Robotics' anticipated growth and its 
commitment to new product and technology development.  As 
a percentage of sales, total operating expenses for the 
two months ended May 25, 1997 were high due to the non-
linear sales pattern described above. 

Other expenses, net, for the two months ended May 25, 
1997 were approximately $6.2 million.  Such expenses 
reflected higher interest expense due to increased short 
term borrowing.  During these two months, U.S. Robotics 
increased its short-term borrowings from approximately 
$61 million to approximately $135 million, $10 million
under an existing $90 million short-term borrowing
arrangement and $125 million under an existing $300 million
revolving credit facility.  Such borrowings were primarily
necessary to fund ongoing operating expenses, including
costs associated with the launch of the new x2 technology,
as well as capital expenditures.  The Company repaid such
short-term borrowing shortly after the closing of the merger
in June 1997 between 3Com and U.S. Robotics and the use of
these borrowing arrangements is no longer expected to be
required.
   
The provision for income taxes for the two months ended 
May 25, 1997 was a net benefit of approximately $82.6 
million, resulting in an effective tax rate of 34.0 
percent.


Merger Related Charge
---------------------

During the Company's first fiscal quarter ended August 
31, 1997, the Company recorded a merger-related charge of 
$426.0 million.  As a result of a reassessment of this 
charge, the Company is reducing the merger-related charge 
by $156.2 million to $269.8 million, as follows (in 
millions):

Total merger-related charge as previously reported    $426.0
Less reductions:
  Product swap-out program                             (61.8) 
  Duplicate facilities and real estate                 (25.4) 
  Goodwill                                             (20.8)
  Duplicate fixed assets                               (13.4)
  Severance and outplacement                            (8.9)
  Other assets and obligations                         (25.9)
                                                       -----
		
Total merger-related charge, as revised               $269.8
                                                       =====


The $61.8 million decrease in the charge reflects a 
change in the amount and timing of recording the product 
swap-out costs associated with certain discontinued 
products.  The Company expects the total cost of the swap-out
program will be significantly less than the amount originally 
accrued.  As originally recorded, shipment of replacement
products resulted in the recognition of sales and cost
of sales.  The revised accounting for the swap-out program
records the net cost of the swap-out as a merger-related
charge as the costs are incurred.  Accordingly, sales and
cost of sales were reduced in the second quarter by
$23.1 million and $5.5 million, respectively.  For the six
months ended November 30, 1997, the reduction of sales and
cost of sales totaled $26.4 million and $6.7 million,
respectively.

The $25.4 million decrease in the charge for the 
elimination of duplicate owned and leased facilities 
primarily reflects a refinement of costs based on 
detailed asset records rather than estimates.  The $20.8 
million decrease in the charge for goodwill reflects a 
reinstatement of the goodwill recorded by U.S. Robotics 
in conjunction with acquisitions of several international 
distributors prior to the merger with 3Com.

Other reductions to the charge primarily reflect 
revisions to fixed asset write-offs, severance and 
outplacement costs, costs for a development contract 
which was not terminated, and a reduction in the amount 
of loss expected on discontinued product inventory and 
other assets.

The Company expects there will be minimal impact on 
future operating results attributable to the 
aforementioned adjustments to the merger-related charge. 
In future quarters the Company estimates there will be a 
total of approximately $10 to $15 million of additional 
merger-related costs associated with the product swap-out 
program.

The revised charge of $269.8 million includes 
approximately $227.9 million of integration expenses and 
$41.9 million of direct transaction costs (consisting 
primarily of investment banking and other professional 
fees).  Integration expenses included:

- $76.1 million related to the closure and elimination 
of owned and leased facilities, primarily duplicate 
corporate headquarters and domestic and European sales 
offices;

- $63.0 million for severance and outplacement costs 
related to the merger, including amounts related to 
termination benefits associated with employment 
agreements.  Employee groups impacted by the merger 
include personnel involved in duplicate corporate 
services, manufacturing and logistics, product 
organizations and sales;

- $49.1 million associated with certain long-term 
assets, primarily including duplicate finance, 
manufacturing, human resource and other management 
information systems, and capitalized purchased research 
and development costs related to a discontinued 
product; and

- $39.7 million primarily associated with the 
elimination and phase-out of duplicate wide area 
networking products (i.e., 3Com's AccessBuilder (registered
trademark) 2000, 4000, 5000 and 8000 products and U.S. Robotics
(registered trademark) TOTALswitch, ATM switch, LANLinker and
related small office home office products), and the discontinuance
of U.S. Robotics' telephony products.  The charge primarily
includes inventory write-offs and noncancelable purchase
commitments.

The remaining merger-related accrual at November 30, 
1997 was approximately $162 million.  Total expected cash 
expenditures relating to the merger charge are estimated 
to be approximately $138 million, of which approximately 
$64 million was disbursed prior to November 30, 1997. 
Termination benefits paid to 561 employees terminated 
through November 30, 1997 (approximately 56 percent of 
the total planned severances) were approximately $30 
million.  The remaining severance and outplacement 
amounts are expected to be paid within the next nine 
months.


Fixed Asset Capitalization Policies
-----------------------------------

The financial statements in the Company's Form 10-Q for 
the period ended August 31, 1997 included the effect of 
conforming the two companies' fixed asset capitalization 
policies, which reduced retained earnings by $41.4 
million at May 31, 1997.  The Company subsequently 
determined that this change was not appropriate.  
Eliminating this change did not have a material impact on 
the Company's consolidated financial statements.


Effect of Restatements on Consolidated Financial Statements
-----------------------------------------------------------

The effect of the restatements described above on the 
consolidated balance sheets as of November 30, 1997 and 
May 31, 1997 and the consolidated statements of 
operations for the three and six months ended November 
30, 1997 and 1996 is as follows (in thousands):


                                 November 30, 1997          May 31, 1997
                                 -----------------          ------------
                                   As                      As 
                               Previously      As      Previously      As
                                Reported    Restated    Reported    Restated
                                --------    --------    --------    --------

Total current assets           $3,099,914  $3,087,809  $2,836,564  $2,689,678

Property and equipment, net       743,195     773,137     723,962     731,301

Total assets                    3,923,202   3,966,062   3,673,170   3,539,783

Total current liabilities       1,339,339   1,297,674   1,095,813   1,115,455

Total stockholders' equity      2,476,461   2,560,986   2,381,042   2,228,344


                                 Three Months Ended      Three Months Ended
                                  November 30, 1997       November 30, 1996
                                  -----------------       -----------------
                                   As                      As 
                               Previously      As      Previously      As
                                Reported    Restated    Reported    Restated
                                --------    --------    --------    --------

Sales                          $1,220,253  $1,197,189  $1,421,660  $1,459,939
Cost of sales                     651,094     645,344     738,252     756,916
                                ---------   ---------   ---------   ---------
Gross margin                      569,159     551,845     683,408     703,023
                                ---------   ---------   ---------   ---------

Operating expenses:
  Sales and marketing             337,594     338,334     243,893     253,160
  Research and development        145,491     144,978     107,388     113,328
  General and administrative       70,507      71,265      55,256      56,417
  Purchased in-process technology      -           -       54,000          -  
  Merger-related charges               -       (1,229)      6,600       6,600
                                ---------   ---------   ---------   ---------
Total operating expenses          553,592     553,348     467,137     429,505
                                ---------   ---------   ---------   ---------

Operating income (loss)            15,567      (1,503)    216,271     273,518
Interest and other income, net      7,637       7,637       4,133       3,532
                                ---------   ---------   ---------   ---------

Income before income taxes         23,204       6,134     220,404     277,050
Income tax provision                8,121       2,113     101,363     102,452
                                ---------   ---------   ---------   ---------

Net income                     $   15,083  $    4,021  $  119,041  $  174,598
                                =========   =========   =========   =========


Net income per common 
  and equivalent share:
    Primary                    $     0.04  $     0.01  $     0.34  $     0.49
    Fully diluted              $     0.04  $     0.01  $     0.34  $     0.49

Shares used in computing
  per share amounts:
    Primary                       365,085     365,085     353,657     354,787
    Fully diluted                 365,105     365,105     355,158     355,979


                                  Six Months Ended        Six Months Ended
                                  November 30,1997        November 30, 1996
                                  ----------------        -----------------
                                   As                      As 
                               Previously      As      Previously      As
                                Reported    Restated    Reported    Restated
                                --------    --------    --------    --------

Sales                          $2,821,115  $2,794,705  $2,671,720  $2,771,443
Cost of sales                   1,483,902   1,476,773   1,395,649   1,450,509
                                ---------   ---------   ---------   ---------
Gross margin                    1,337,213   1,317,932   1,276,071   1,320,934
                                ---------   ---------   ---------   ---------

Operating expenses:
  Sales and marketing             638,901     640,712     449,350     475,637
  Research and development        287,608     287,776     205,504     211,381
  General and administrative      133,096     134,130     102,565     106,153
  Purchased in-process technology      -           -       54,000      54,000
  Merger-related charges          426,000     268,558       6,600       6,600
                                ---------   ---------   ---------   ---------
Total operating expenses        1,485,605   1,331,176     818,019     853,771
                                ---------   ---------   ---------   ---------

Operating income (loss)          (148,392)    (13,244)    458,052     467,163
Interest and other income, net     10,598      10,598       7,106       5,810
                                ---------   ---------   ---------   ---------

Income (loss) before income
  taxes                          (137,794)     (2,646)    465,158     472,973
Income tax provision (benefit)     (6,057)     44,566     191,247     193,331
                                ---------   ---------   ---------   ---------

Net income (loss)              $ (131,737) $  (47,212) $  273,911  $  279,642
                                =========   =========   =========   =========


Net income (loss) per common 
  and equivalent share:
    Primary                    $    (0.37) $    (0.13) $     0.78  $     0.79
    Fully diluted              $    (0.37) $    (0.13) $     0.77  $     0.79

Shares used in computing
  per share amounts:
    Primary                       353,529     353,529     352,814     352,563
    Fully diluted                 353,539     353,529     353,772     353,586


Effect of Restatement on Pro Forma Information
----------------------------------------------

The fiscal 1997 consolidated financial statements have 
been restated to include U.S. Robotics information on 
the basis described above.  The consolidated statements 
of income for the fiscal years ended May 31, 1996 and 
1995 include the U.S. Robotics statements of income for 
the fiscal years ended September 29, 1996 and October 1, 
1995, respectively.  This presentation has the effect of 
including U.S. Robotics' results of operations for the 
three month period ended September 29, 1996 in both the 
combined years ended May 31, 1997 and 1996, and reflects 
sales of $611.4 million and net income of $13.5 million, 
which has been reported as a decrease to the Company's 
fiscal 1997 retained earnings.

The combined results below reflect reclassifications to 
conform financial statement presentation.  Summarized 
proforma operating results as previously reported and as 
restated for the three and six months ended November 30, 
1996 are as follows:  


                               Three Months Ended        Six Months Ended
                                  November 30,              November 30,     
                                      1996                      1996
                           --------------------------------------------------
                                (In thousands, except per share amounts)
                           As Previously     As      As Previously     As
                             Reported     Restated     Reported     Restated
                             --------     --------     --------     --------

Sales:
3Com                        $  820,296   $  820,296   $1,530,436   $1,530,436
U.S. Robotics                  611,410      645,412    1,158,195    1,256,822
Reclassifications to 
  conform financial 
  statement presentation       (10,046)      (5,769)     (16,911)     (15,815)
                             ---------    ---------    ---------    ---------
Combined                    $1,421,660   $1,459,939   $2,671,720   $2,771,443
                             =========    =========    =========    =========

Net income:
3Com                        $  105,569   $  105,569   $  197,141   $  197,141
U.S. Robotics                   13,472       69,029       76,770       82,501
                             ---------    ---------    ---------    ---------
Combined                    $  119,041   $  174,598   $  273,911   $  279,642
                             =========    =========    =========    =========

Net income per common
  and equivalent share
  (on a fully diluted basis):
3Com                        $     0.56   $     0.56   $     1.06   $     0.53
U.S. Robotics (1)                 0.08         0.41         0.45         0.49
                             ---------    ---------    ---------    ---------
Combined                    $     0.34   $     0.49   $     0.77   $     0.79
                             =========    =========    =========    =========

(1)  Adjusted for effect of exchange ratio of 1.75 shares
of 3Com Common Stock for each share of U.S. Robotics 
Common Stock.


3.	Inventories consisted of (in thousands):


                               November 30, 1997            May 31, 1997
                            ----------------------    ----------------------
                                As                        As 
                            Previously       As       Previously       As
                             Reported     Restated     Reported     Restated
                             --------     --------     --------     --------

Finished goods              $  459,692   $  466,690   $  262,023   $  346,631
Work-in-process                 53,620       53,620       35,462       31,606
Raw materials                  115,662      115,662      104,871      135,503
                             ---------    ---------    ---------    ---------

Total                       $  628,974   $  635,972   $  402,356   $  513,740
                             =========    =========    =========    =========


4.	Net Income (Loss) Per Common and Equivalent Share

Net income (loss) per common and equivalent share is 
computed based on the weighted average number of common 
shares and the dilutive effects of stock options 
outstanding during the period using the treasury stock 
method.  Common equivalent shares were not included in 
the calculation of earnings per share for the six months 
ended November 30, 1997 as they were antidilutive.  The 
effect of the assumed conversion of the 10.25 percent 
convertible subordinated notes was antidilutive for all 
periods presented.


5.	Litigation

The Company is a party to lawsuits in the normal course 
of its business.  The Company notes that (i) litigation 
in general and patent litigation in particular can be 
expensive and disruptive to normal business operations 
and (ii) the results of complex legal proceedings can be 
very difficult to predict with any certainty.


Securities Litigation

In December 1997 and January 1998, several putative 
shareholder class action lawsuits were filed against the 
Company and certain of its officers and directors in the 
United States District Court for the Northern District of 
Illinois and in the United States District Court for the 
Northern District of California.  The complaints allege 
violations of the federal securities laws, specifically 
Sections 10(b) and 20(a) of the Securities and Exchange 
Act of 1934.  The complaints allege class periods between 
May 19, 1997 and November 14, 1997 and do not specify the 
damages sought.  The Company believes it has meritorious 
defenses to the claims and intends to contest the 
lawsuits vigorously.  An unfavorable resolution of the 
actions could have a material adverse effect on the 
business, results of operations or financial condition of 
the Company.

U.S. Robotics, certain of its directors, and the Company 
were named as defendants in shareholder class actions 
relating to the merger between the Company and U.S. 
Robotics.  (In re: U.S. Robotics Corporation Shareholders 
Litigation, Delaware Chancery Court Consolidated Civil 
Action No. 15580). On October 7, 1997, all claims 
related to such suits were settled pursuant to a 
settlement approved by the Delaware Chancery Court.  
Results of the settlement did not have a material effect 
on the Company's results of operations or financial 
condition.

On March 24, and May 5, 1997, putative shareholder class 
action lawsuits, entitled Hirsch v. 3Com Corporation, et 
al., Civil Action No. CV764977, and Kravitz v. 3Com 
Corporation, et al., Civil Action No. CV765962, 
respectively, were filed against the Company and certain 
of its officers and directors in the California Superior 
Court, Santa Clara County (the Superior Court).   
Following resolution of a demurrer filed by the Company, 
the remaining causes of action in the  complaints allege 
violations of the state securities laws, specifically 
sections 25400 and 25500 of the California Corporations 
Code. The complaints, which cover a putative period of 
September 24, 1996 through February 10, 1997, do not 
specify the damages sought. The Company believes it has 
meritorious defenses to the claims and intends to contest 
the lawsuits vigorously.  An unfavorable resolution of 
the actions could have a material adverse effect on the 
business, results of operations or financial condition of 
the Company.


Intellectual Property Litigation

In September 1997, Livingston Enterprises, Inc. 
(Livingston) filed suit against U.S. Robotics in the 
United States District Court for the Northern District of 
California (Livingston Enterprises, Inc. v. U.S. Robotics 
Access Corporation, Case No. C-97-3551(CRB)), claiming 
copyright infringement, misappropriation of trade 
secrets, breach of contract and unfair competition with 
respect to certain software code previously licensed to 
U.S. Robotics for incorporation in certain of its remote 
access server and concentrator products.  Livingston 
seeks injunctive relief and damages that are not 
specified as to amount.  The Company believes it has 
meritorious defenses to Livingston's claims and intends 
to contest the lawsuit vigorously.  In September 1997, 
Livingston filed a separate action in the same federal 
court (Livingston Enterprises, Inc. v. U.S. Robotics 
Access Corporation, Case No. C-97-3487 (CRB)) seeking a 
declaratory judgment to the effect that one of U.S. 
Robotics' U.S. patent is invalid and not infringed by 
Livingston's products, as well as unspecified damages.  
U.S. Robotics has answered this complaint and filed 
counterclaims alleging infringement of such patent by 
Livingston. An unfavorable resolution of the action could 
have a material adverse effect on the business, results 
of operations or financial condition of the Company.

On April 26, 1997, Xerox Corporation filed suit against 
U.S. Robotics in the United States District Court for the 
Western District of New York (Xerox Corporation v. U.S. 
Robotics Corporation and U.S. Robotics Access Corp., No. 
97-CV-6182T), claiming infringement of one United States 
Patent.  The complaint alleges willful infringement and 
prays for unspecified damages and injunctive relief.  In 
a press release dated April 30, 1997, Xerox alleged that 
its patent, issued January 21, 1997, "covers the use and 
recognition of handwritten text using an alphabet system 
designed especially for reliable recognition in pen 
computers," and that Palm Computing Corporation's (Palm) 
PalmPilotTM hand-held computer and "Graffiti" software in 
its PalmTM operating system infringe the Xerox patent.  
Palm is a wholly-owned subsidiary of the Company.  The 
Company believes it has meritorious defenses to Xerox's 
claims and intends to contest the lawsuit vigorously.  An 
adverse resolution of the action could have a material 
adverse effect on the Company's results of operations and 
financial condition in the quarter in which such adverse 
resolution occurs.

On February 13, 1997, Motorola, Inc. filed suit against 
U.S. Robotics in the United States District Court for the 
District of Massachusetts (Motorola, Inc. v. U.S. 
Robotics Corporation, et al., Civil Action No. 97-
10339RCL), claiming infringement of eight United States 
patents.  The complaint alleges willful infringement and 
prays for unspecified damages and injunctive relief.  
U.S. Robotics has filed an answer to Motorola's claims 
setting forth its defenses and asserting counterclaims 
which allege infringement of a U.S. Robotics patent, 
violation of antitrust laws, promissory estoppel and 
unfair competition.  The Company believes it has 
meritorious defenses to the claims and intends to contest 
the lawsuit vigorously.  An unfavorable resolution of the 
action could have a material adverse effect on the 
business, results of operations or financial condition of 
the Company.


Consumer Litigation

During 1997, three putative class action lawsuits 
were filed against the Company or its subsidiary, U.S. 
Robotics in the state courts of California and Illinois.  
Each of the actions seeks damages as a result of alleged 
misrepresentations by the Company or U.S. Robotics in 
connection with the sale of its new x2TM products and 
products upgradeable to x2 under various California and 
Illinois consumer fraud statutes and under common law 
theories including fraud and negligent misrepresentation.  
Plaintiffs in Bendall, et al. v. U.S. Robotics 
Corporation, et al., (No. 170441, Superior Court of Marin 
County, California), Lippman, et al v. 3Com, (No. 97 CH 
09773, Circuit Court of Cook County, Illinois), and 
Michaels, et al. v. U.S. Robotics Access Corporation et 
al., (No. 94 CH 14417, Circuit Court of Cook County, 
Illinois) seek certification respectively of nationwide 
classes of purchasers of x2 technology during the 
approximate period November 1996 through at least May 
1997.  U.S. Robotics' motion to dismiss the Bendall 
action is presently pending; the Lippman action presently 
is stayed, and a responsive pleading is not yet due in 
the Michaels action.  The complaints seek injunctive 
relief and an unspecified amount of damages.  Two other 
actions purporting to be brought in the public interest 
have also been filed against U.S. Robotics in state court 
in California under California statutes arising out of 
U.S. Robotics alleged misrepresentation in connection 
with the sale of the x2 products.  Levy v. U.S. Robotics 
Corporation, (No. 170968, Superior Court of Marin County, 
California) and Intervention Inc. v. U.S. Robotics 
Corporation, (No. 984352, Superior Court of San 
Francisco, California) seek injunctive and unspecified 
monetary relief.  The Company believes it has meritorious 
defenses to these lawsuits and intends to contest the 
lawsuits vigorously. An unfavorable resolution of the 
actions could have a material adverse effect on the 
business, results of operations or financial condition of 
the Company.


6.	Effects of Recent Accounting Pronouncements

In February 1997, the Financial Accounting Standards 
Board (FASB) issued Statement of Financial Accounting 
Standards No. 128 (SFAS 128), "Earnings per Share."  This 
Statement establishes and simplifies standards for 
computing and presenting earnings per share.  SFAS 128 
will be effective for the Company's third quarter of 
fiscal 1998, and requires restatement of all previously 
reported earnings per share data that are presented.  
Early adoption of this Statement is not permitted.  SFAS 
128 replaces primary and fully diluted earnings per share 
with basic and diluted earnings per share.  Under SFAS 
128, the Company's reported earnings per share for the 
three and six months ended November 30, 1997 and 1996 
would have been:


                   Three Months Ended         Six Months Ended
                      November 30,              November 30,
                   1997         1996         1997         1996
                   ----         ----         ----         ----

Basic            $  0.01      $  0.53      $ (0.14)     $  0.85
Diluted          $  0.01      $  0.49      $ (0.14)     $  0.79


In June 1997, the FASB issued SFAS 130, "Reporting
Comprehensive Income."  This statement establishes 
standards for the reporting and display of comprehensive 
income and its components.  SFAS 130 will be effective 
for the Company's fiscal year 1999 and requires 
reclassification of financial statements for earlier 
periods for comparative purposes.

In June 1997, the FASB issued SFAS 131, "Disclosures 
About Segments of an Enterprise and Related Information." 
This statement requires that financial information be 
reported on the basis used internally for evaluating 
segment performance and deciding how to allocate 
resources to segments.  SFAS 131 is effective for the 
Company's fiscal year 1999 and requires restatement of 
all previously reported information for comparative 
purposes.


7.	Subsequent Events

On December 17, 1997, the Company's Board of Directors 
approved the repricing of certain employee stock options 
with an exercise price in excess of the fair market value 
of the Company's common stock on January 12, 1998.  The 
exercise price of such employee stock options was reset 
to the closing market price on January 12, 1998.  All 
such options retain their original vesting schedules but 
are subject to a nine-month period in which exercises are 
prohibited.  Stock options held by executive officers and 
directors were not eligible for such repricing.

On December 23, 1997, the Company redeemed its 
convertible subordinated notes totaling $110 million.  
Under the terms of the note agreement, cash payments 
related to principal, accrued interest and prepayment 
penalties totaled approximately $115 million.




                              3Com Corporation

Item 2.	Management's Discussion and Analysis of 
        Financial Condition and Results of Operations

The Company has restated its consolidated financial statements 
for the three and six months ended November 30, 1997 and 1996, 
and the fiscal year ended May 31, 1997.  For a detailed 
description of the restatements, please see Notes 1 and 2 of 
Notes to Consolidated Financial Statements.  The following 
Management's Discussion and Analysis of Financial Condition 
and Results of Operations pertains to the consolidated 
financial statements, as restated.


Results of Operations
---------------------

The following table sets forth, for the periods indicated, the 
percentage of total sales represented by the line items 
reflected in the Company's consolidated statements of 
operations:


                                 Three Months Ended        Six Months Ended 
                                    November 30,             November 30,
                                 ------------------        ----------------
                                 1997         1996         1997         1996
                                 ----         ----         ----         ----
									
Sales.......................... 100.0 %      100.0 %      100.0 %      100.0 %
Cost of sales..................  53.9         51.8         52.8         52.3
                                -----        -----        -----        -----
Gross margin...................  46.1         48.2         47.2         47.7
                                -----        -----        -----        -----
Operating expenses:									
  Sales and marketing..........  28.2         17.3         22.9         17.2 
  Research and development.....  12.1          7.8         10.3          7.6 
  General and
    administrative.............   6.0          3.9          4.8          3.8
  Purchased in-process
    technology.................    -            -            -           1.9
  Merger-related charges.......  (0.1)         0.5          9.7          0.3
                                -----        -----        -----        -----
    Total operating expenses...  46.2         29.5         47.7         30.8
                                -----        -----        -----        -----
Operating income (loss)........  (0.1)        18.7         (0.5)        16.9 
Interest and other income,
  net..........................   0.6          0.3          0.4          0.2
                                -----        -----        -----        -----
Income (loss) before income
  taxes........................   0.5         19.0         (0.1)        17.1 
Income tax provision...........   0.2          7.0          1.6          7.0
                                -----        -----        -----        -----
Net income (loss)..............   0.3 %       12.0 %       (1.7)%       10.1 %
                                =====        =====        =====        =====

Excluding merger-related 
  and purchased in-process
  technology charges:								
    Total operating expenses..   46.3 %       29.0 %       38.0 %       28.6 %
    Operating income (loss)...   (0.2)        19.2          9.1         19.0 
    Net income................    0.2         12.4          6.2         12.3 


Sales in the second quarter of fiscal 1998 totaled $1.2 
billion, a decrease of $262.8 million or 18 percent from the 
corresponding quarter a year ago.  Sales of network systems 
products (e.g., switches, routers, hubs, and remote access 
concentrators) in the second quarter of fiscal 1998 decreased 
three percent from the same quarter one year ago and decreased 
16 percent compared to the first quarter of fiscal 1998.  
Sales of network systems products represented 50 percent of 
total sales in the second quarter of fiscal 1998, compared to 
42 percent in the year ago quarter.  Sales of client access 
products (e.g., modems and network interface cards (NICs) in 
the second quarter of fiscal 1998 decreased 29 percent from 
the same quarter a year ago and 32 percent from the first 
quarter of fiscal 1998.  Net sales of modem products during 
the second quarter were approximately $325 million.  Sales of 
client access products in the second quarter of fiscal 1998 
represented 50 percent of total sales compared to 58 percent 
in the second quarter of fiscal 1997.  Domestic sales 
represented 58 percent of total sales for the second quarter 
of fiscal 1998.  Domestic and international sales decreased 17 
percent and 19 percent, respectively, when compared to the 
second quarter of fiscal 1997.  The Company also experienced a 
sequential decline from the first quarter of fiscal 1998 in 
domestic and international sales of 22 percent and 29 percent, 
respectively.

Sales in the first six months of fiscal 1998 totaled $2.8 
billion, an increase of $23.3 million or one percent from the 
corresponding period a year ago.  Sales of network systems 
products in the first six months of fiscal 1998 increased 8 
percent from the same period one year ago, and represented 47 
percent of total sales, compared to 44 percent in the year ago 
period.  Sales of client access products in the first six 
months of fiscal 1998 decreased five percent from the same 
period one year ago, and represented 53 percent of total 
sales, compared to 56 percent in the first six months of 
fiscal 1997.  Domestic sales for the first six months of 
fiscal 1998 comprised 56 percent of total sales compared to 60 
percent in the same period a year ago.  Domestic sales 
decreased five percent while international sales increased 
nine percent when compared to the first six months of fiscal 
1997.  During the quarter, the Company began transitioning to 
next generation platforms across several major product 
categories.  For example, the Company introduced and began 
shipping new CoreBuilderTM High-Function Switches and began 
shipping the Total ControlTM HiPerTM Access System.  In 
addition, the pricing environment continued to be very 
competitive, and although the Company experienced significant 
year-over-year unit growth in key products such as Fast 
Ethernet NICs and workgroup switches, these gains were 
partially offset by declines in average selling prices.

The Company believes that the year-over-year decrease in 
second quarter sales and the sequential decrease in sales from 
the first quarter of fiscal 1998 is due to a variety of 
factors, including those discussed below.

In light of information received late in the second quarter, 
the Company adopted a new inventory business model.  The new 
model generally calls for fewer weeks supply of inventory in 
the channel.  In order to begin implementing the new model, 
the Company constrained sales into its distribution channels.  
The Company made progress during the second quarter in 
implementing the new model.

The Company believes another factor affecting sales, in 
particular modem and remote access concentrator sales, was the 
failure of the International Telecommunications Union (ITU) to 
determine a standard for 56 Kbps technology.  The Company 
believes that the delay in finalizing such standards resulted 
in customers postponing buying decisions.

During the second quarter of fiscal 1998, sales in the Asia 
Pacific region compared to the second quarter of fiscal 1997 
and the first quarter of fiscal 1998 decreased nine percent 
and 35 percent, respectively.  Historically, the Asia Pacific 
region had been a high growth region for the networking 
industry and the Company.  During the second quarter of fiscal 
1998, however, several Asian countries experienced a weakening 
of their local currencies and turmoil in their financial 
markets and institutions, which the Company believes adversely 
affected financial results for the second quarter of fiscal 
1998.

An additional factor affecting second quarter results was an 
apparent slowdown in the growth of the networking industry.  
Recent reports by industry sources indicated that the 
networking industry worldwide grew by less than 20 percent 
during 1997, well below historical growth rates.

Gross margin as a percentage of sales was 46.1 percent in the 
second quarter of fiscal 1998, compared to 48.2 percent in the 
second quarter of fiscal 1997 and 48.0 percent in the first 
quarter of fiscal 1998.  The decline in margins during the 
second quarter of fiscal 1998 resulted, in part, from period 
costs being a higher percentage of sales.  Margins also 
reflected higher sales of certain NICs and workgroup switching 
products which have lower margins than other NICs and 
workgroup switching products.  These factors were partially 
offset by increased sales of higher margin modem products, 
such as the U.S. Robotics (registered trademark) brand 56 Kbps
modem with x2TM technology.  Gross margin as a percentage of sales
was 47.2 percent in the first six months of fiscal 1998, compared
to 47.7 percent for the first six months of fiscal 1997.

Operating expenses in the second quarter of fiscal 1998 were 
$553.3 million or 46.2 percent of sales, compared to $429.5 
million or 29.5 percent of sales in second quarter of fiscal 
1997 and $777.8 million or 48.7 percent of sales in the first 
quarter of fiscal 1998.  Operating expenses in the first six 
months of fiscal 1998 were $1,331.2 million or 47.7 percent of 
sales, compared to $853.8 million or 30.8 percent of sales in 
first six months of fiscal 1997.  Operating expenses as a 
percentage of sales were higher than historical levels 
primarily due to the reduced level of sales for the second 
quarter of fiscal 1998, as discussed above. Excluding a charge 
of $6.6 million associated with 3Com's acquisition of OnStream 
Networks, Inc. (OnStream), operating expenses would have been 
$422.9 million, or 29.0 percent of sales for the second 
quarter of fiscal 1997.  Excluding the merger-related charge 
of $268.6 million in the first six months of fiscal 1998, 
operating expenses would have been $1,062.6 million or 38.0 
percent of sales.

Sales and marketing expenses in the second quarter of fiscal 
1998 increased $85.2 million or 34 percent from the second 
quarter of fiscal 1997 and $36.0 million or 12 percent from 
the first quarter of fiscal 1998.  Sales and marketing 
expenses as a percentage of sales increased to 28.2 percent of 
sales in the second quarter of fiscal 1998, from 17.3 percent 
in the corresponding fiscal 1997 period and 18.9 percent in 
the first quarter of fiscal 1998.  Sales and marketing 
expenses in the first six months of fiscal 1998 increased 
$165.1 million or 35 percent from the first six months of 
fiscal 1997.  The increase in absolute dollars primarily 
reflected an increase in field sales, marketing and customer 
support.  

Research and development expenses in the second quarter of 
fiscal 1998 increased $31.7 million or 28 percent from the 
year-ago period, and $2.2 million or 2 percent from the first 
quarter of fiscal 1998.  Research and development expenses 
increased to 12.1 percent of total sales in the second quarter 
of fiscal 1998, compared to 7.8 percent in second quarter of 
fiscal 1997 and 8.9 percent in the first quarter of fiscal 
1998.  Research and development expenses in the first six 
months of fiscal 1998 increased $76.4 million or 36 percent 
from the year-ago six-month period.  The increase in research 
and development expenses in absolute dollars was primarily 
attributable to the cost of developing the Company's new 
products in the areas of client access, switching, and network 
management, and its expansion into new technologies and 
markets.  The Company believes the timely introduction of new 
technologies and products is crucial to its success, and plans 
to continue to make acquisitions or strategic investments to 
accelerate time to market where appropriate.

General and administrative expenses in the second quarter of 
fiscal 1998 increased $14.8 million or 26 percent from the 
same period a year ago, and $8.4 million or 13 percent from 
the first quarter of fiscal 1998.  General and administrative 
expenses increased to 6.0 percent of total sales in the second 
quarter of fiscal 1998, compared to 3.9 percent in the second 
quarter of fiscal 1997 and 4.0 percent in the first quarter of 
fiscal 1998.  General and administrative expenses in the first 
six months of fiscal 1998 increased $28.0 million or 26 
percent from the same period a year ago.  The increase in 
general and administrative expenses in absolute dollars 
primarily reflected an expansion of the Company's 
infrastructure.

During the second quarter of fiscal 1998, merger-related 
charges were a net credit of $1.2 million.  A $15.4 million 
reduction in previously recorded merger-related costs, 
primarily due to a reduction in the estimate of costs 
associated with duplicate facilities, was partially offset by 
$14.2 million of product swap-out costs incurred during the 
quarter.
 
Interest and other income, net, increased $4.1 million or 116 
percent compared to the second quarter of fiscal 1997 and $4.7 
million compared to the first quarter of fiscal 1998.  
Interest and other income, net, increased approximately $4.8 
million in the first six months of fiscal 1998 compared to the 
first six months of fiscal 1997.  Such increases were due to 
higher interest income in the second quarter of fiscal 1998 
and lower foreign currency losses.  The majority of the 
Company's sales are denominated in U.S. Dollars.  Where 
available, the Company enters into foreign exchange forward 
contracts to hedge certain balance sheet exposures and 
intercompany balances against future movements in foreign 
exchange rates.

The Company's effective income tax rate was approximately 34.4 
percent in the second quarter of fiscal 1998 compared to 37.0 
percent in the second quarter of fiscal 1997.  Excluding the 
merger-related charge associated with OnStream, the pro forma 
income tax rate was 36.1 percent for the second quarter of 
fiscal 1997.  The Company recorded a tax provision of $44.6 
million for the first six months of fiscal 1998, compared to 
$193.3 million for the first six months of fiscal 1997.  The 
provision in the first six months of fiscal 1998 reflected the 
non-deductibility of certain costs associated with the U.S. 
Robotics merger.  Excluding these costs, the pro forma 
effective income tax rate was 35.0 percent for the first six 
months of fiscal 1998.  The provision for the first six months 
of fiscal 1997 reflected the non-deductibility of the 
purchased in-process technology charge associated with the 
acquisition of Scorpio and merger-related charge associated 
with OnStream.  Excluding these charges, the pro forma income 
tax rate was 36.2 percent for the first six months of fiscal 
1997.

Net income for the second quarter of fiscal 1998 was $4.0 
million, or $0.01 per share, compared to net income of $174.6 
million, or $0.49 per share, for the second quarter of fiscal 
1997.  Excluding the merger-related charge associated with 
OnStream, net income was $181.2 million, or $0.51 per share 
for the second quarter of fiscal 1997.  Net loss for the first 
six months of fiscal 1998 was $47.2 million, or $0.13 per 
share, compared to net income of $279.6 million, or $0.79 per 
share, for the first six months of fiscal 1997.  Excluding the 
merger-related charges associated with U.S. Robotics, net 
income was $172.8 million, or $0.48 per share for the first 
six months of fiscal 1998.  Excluding the purchased in-process 
technology and merger-related charges associated with Scorpio 
and OnStream, net income was $340.2 million, or $0.96 per 
share for the first six months of fiscal 1997.


Business Environment and Risk Factors

This report contains certain forward looking statements, 
including statements regarding future trends in market growth, 
sales, gross margins, and inventory levels.  Actual results 
could vary materially based on a number of factors, including 
but not limited to those set forth below.

The Company participates in a highly volatile industry which 
is characterized by vigorous competition for market share, 
rapid technological development, consolidations, and 
uncertainty over adoption of industry standards.  This has in 
the past resulted and could in the future result in aggressive 
pricing practices and increased competition, both from start-
up companies and from well-capitalized computer systems, 
communications and other major technology companies.  For 
example, in the third quarter of fiscal 1997, a major 
competitor reduced its average selling prices on Fast Ethernet 
NIC products by approximately 40 percent.  The Company 
immediately responded with similar price cuts.  As a result, 
the Company experienced a significant downward pressure on 
this product's gross margin and an accelerated transition from 
10 Mbps Ethernet to Fast Ethernet NICs.  In addition, as new 
competitors enter the market and offer competing products, 
pricing may be affected.  The Company believes there is a risk 
of downward pricing pressure on the Company's products, 
including products incorporating 56 Kbps modem technology.  
Pricing pressure intensified across a variety of the Company's 
products during the second quarter of fiscal 1998, and may 
intensify in coming quarters.

Recently, market researchers have reported slower industry 
growth worldwide in calendar 1997 than in the past.  Although 
market researchers generally forecast a small increase in 
networking growth rates in calendar 1998 from 1997 levels, 
there can be no assurance that this will occur.  Similarly, 
there can be no assurances that the Company's results in any 
particular quarter will fall within market researchers' 
forecasted ranges.

The Company sells a significant portion of its products to 
distributors and resellers. In turn, such distributors and 
resellers maintain significant levels of the Company's 
products in their inventories.  The Company attempts to ensure 
appropriate levels of inventory are available to end users by 
working closely with these resellers and distributors. In 
light of information received late in the second quarter, the 
Company adopted a new inventory business model.  The new model 
generally calls for fewer weeks supply of inventory in the 
channel.  In order to begin implementing the new model, the 
Company constrained sales into its distribution channels.  The 
Company made progress during the second quarter in 
implementing the new model.  However, the Company anticipates 
that the full implementation of the new inventory business 
model will require additional reductions in channel inventory 
during the third quarter and possibly beyond.  Such reductions 
could adversely affect the Company's sales and results of 
operations.

The Company distributes a significant portion of its products 
through third party distributors and resellers.  Due to 
consolidation in the distribution and reseller channels and 
the Company's increased volume of sales into these channels, 
the Company has experienced an increased concentration of 
credit risk.  While the Company continually monitors and 
manages this risk, financial difficulties on the part of one 
or more of the Company's resellers may have a material adverse 
effect on the Company's results of operations.

The Company's operations in certain markets, which are 
characterized by economic and political instability and 
currency fluctuations, may subject the Company's resellers to 
financial difficulties which may have an adverse impact on the 
Company.  For example, the recent instability in the Asian 
financial markets appears to have negatively impacted sales, 
and may continue to negatively impact sales in those markets 
in a number of ways, including: increasing competition from 
local competitors that offer sales terms in local currencies, 
reducing access to sources of capital needed by customers to 
make purchases, and slowing end user purchases.  Should the 
Asian economic environment fail to improve, the Company would 
consider continuing to expand its exposure to foreign 
currencies to preserve long-term customer relationships.  A 
significant fluctuation in foreign currency could have an 
adverse impact on the Company.  Finally, the aforementioned 
instability may increase credit risks as the recent weakening 
of certain Asian currencies may result in insolvencies or 
otherwise impair customers' ability to repay existing 
obligations.  Depending on the situation in Asia in coming 
quarters, any or all of these factors could adversely impact 
the Company's financial results in future quarters.

Typically, quarterly sales and results of operations depend on 
the volume and timing of orders, and the ability to fulfill 
them within the quarter.  The Company's customers historically 
request fulfillment of orders in a short period of time, 
resulting in a minimal backlog and limited visibility to 
future sales trends.  Should incoming order rates decline, if 
ordered products are not readily available, or if the Company 
does not immediately fill orders in an attempt to further 
reduce channel inventory levels, the Company's results of 
operations could be adversely affected.  

The Company historically has sold a large percentage of its 
products in the third month of each quarter.  This subjects 
the Company to additional business risks due to unexpected 
disruptions in functions, including but not limited to 
manufacturing, order management, information systems and 
shipping, which could have an adverse affect on the Company's 
results of operations.

The Company's success depends, in substantial part, on the 
timely and successful introduction of new products.  An 
unexpected change in one or more of the technologies affecting 
network communications, or in market demand for products based 
on a particular technology, or entry by new competitors, could 
lead to a slowdown in sales of certain products, and could 
have a material adverse effect on the Company's operating 
results if the Company does not respond timely and effectively 
to such changes.  The Company is engaged in research and 
development activities in certain emerging LAN and WAN high-
speed standards and high-speed technologies, such as: Fast 
Ethernet, Gigabit Ethernet, ATM, 56 Kbps, ISDN, xDSL and data-
over-cable.  As the industry standardizes on high-speed 
technologies, there can be no assurance that the Company will 
be able to respond promptly and cost-effectively to compete in 
the marketplace.

The Company's success depends, in substantial part, on the 
adoption of industry standards, the timely and successful 
introduction of products that are compliant with new industry 
standards, and the Company's ability to address competing 
technological and product developments.  Delays in adoption of 
industry standards or adoption of standards incorporating 
competing technologies or competitors' intellectual property 
could adversely affect the Company's sales or operating 
margins.  In December, a technical compromise was reached 
among ITU members that may result in the determination of a 
standard for 56 Kbps technology in January 1998 with official 
adoption in September. While the Company believes that it will 
be able to comply quickly with this proposed standard and 
offer its customers software upgrades to the new standard, 
there can be no assurances that the development of this 
standard and the Company's compliance with it will proceed as 
rapidly or smoothly as expected or that these events will 
result in increased demand for the Company's 56 Kbps products.  
Any benefits which the Company may derive from the expected 
adoption of this proposed standard will continue to be 
dependent upon the timing and extent to which the standard 56 
Kbps technology is deployed by Internet Service Providers and 
accepted by Internet users.  Moreover, consumer confusion 
regarding 56 Kbps technology, which has negatively impacted 
sales to date, may persist notwithstanding final determination 
of the ITU standard.

The Company operates in an industry in which the ability to 
compete is dependent on the development or acquisition and 
protection of proprietary technology, which must be protected  
both to secure the benefits of the Company's innovations in 
its own products and to better enable the Company to license 
proprietary technology from others on acceptable terms.  The 
Company attempts to perfect and preserve intellectual property 
rights in the technologies it develops through a combination 
of trade secrets, patents, copyrights and trademarks.  There 
can be no assurance that the steps taken by the Company will 
be sufficient to prevent misappropriation or infringement of  
its intellectual property or that competitors will not 
independently develop technologies or procure intellectual 
property rights that are equivalent or superior to those of 
the Company.

The Company, from time to time, must negotiate licenses with 
third parties in order to obtain rights to incorporate 
proprietary technologies, including de facto and official 
standard networking and communications protocols and 
specifications, into its products.  In most instances, the 
owners of intellectual property rights covering technologies 
required to implement official  standards have undertaken to 
license such rights on reasonable and non-discriminatory 
terms, and as a general rule the Company has no reason to 
believe that these parties will fail to honor their 
undertakings and the Company anticipates that it will be able 
to enter into licenses with such parties on reasonable terms 
that will be comparable to those available to its competitors.  
There can be no assurances in this regard, however, and there 
is always the potential for disputes and litigation, even 
where a third party owner of intellectual property rights has 
undertaken to make licenses generally available or has 
actually entered into licenses upon which the Company has 
relied in designing and making its products.  By way of 
example, the Company is currently involved in disputes with 
Motorola, Inc. over patents related to certain modem standards 
and with Livingston Enterprises, Inc. over certain software 
previously licensed by U.S. Robotics.  See Part II. Item 1. 
Legal Proceedings.  The Company's failure to obtain and 
maintain licenses for all of the third party intellectual 
property rights required for the manufacture, sale and use of 
its products, particularly those which must comply with 
industry standard protocols and specifications in order to be 
commercially viable, could have a material adverse effect on 
the Company's business, results of  operation, and financial 
condition.     

The Company derives a portion of its sales from original 
equipment manufacture (OEM) partners including PC companies 
who bundle 3Com network interface cards and modems, and 
incorporate chip-sets into their products.  The Company 
believes that future sales growth of these products is 
dependent, in part, on the Company's ability to strengthen 
relationships and increase business with OEM partners.  OEM 
sales are characterized as having lower average selling prices 
and gross margins.  Consequently, the Company's overall gross 
margin percentage may be adversely impacted if OEM sales 
become a larger percentage of the Company's business.  Certain 
OEMs in the PC industry are integrating communication 
subsystems on the PC motherboard.  If such integration becomes 
a trend, the Company's future sales growth may be adversely 
impacted.

Acquisitions of complementary businesses and technologies, 
including technologies and products under development, are an 
active part of the Company's overall business strategy.  
Certain of the Company's major competitors have also been 
engaged in merger and acquisition transactions.  Such 
consolidations by competitors are creating entities with 
increased market share, customer base, technology and 
marketing expertise, sales force size, or proprietary 
technology in segments in which the Company competes.  These 
developments may adversely affect the Company's ability to 
compete in such segments.

In June 1997, the Company merged with U.S. Robotics, the 
largest acquisition in the history of the networking industry.  
Large acquisitions are challenging, in general, and there can 
be no assurance that products, technologies, distribution 
channels, customer support operations, management information 
systems, key personnel and businesses of U.S. Robotics or 
other acquired companies will be effectively assimilated into 
the Company's business or product offerings, or that such 
integration will not adversely affect the Company's business, 
financial condition or results of operations.  The inability 
of management to successfully integrate the operations of the 
two companies in a timely manner could have a material adverse 
effect on the business, results of operations, and financial 
condition of the Company.

The high-growth nature of the computer networking industry, 
coupled with critical time-to-market factors, has caused 
increased competition and consolidation.  As a result, there 
has been a significant increase in the cost of acquiring 
computer networking companies.  There can be no assurance that 
the Company will continue to be able to identify and 
consummate suitable acquisition transactions in the future.  
However, should the Company consummate acquisitions in the 
future, the impact may result in increased dilution of the 
Company's future earnings.

The Company's products are covered by warranties and the 
Company is subject to contractual commitments.  If unexpected 
circumstances arise such that the product does not perform as 
intended and the Company is not successful in resolving 
product quality or performance issues, there could be an 
adverse impact on the financial results of the Company.

Some key components of the Company's products are currently 
available only from single sources.  There can be no assurance 
that in the future the Company's suppliers will be able to 
meet the Company's demand for components in a timely and cost-
effective manner.  The Company's operating results and 
customer relationships could be adversely affected by either 
an increase in prices for, or an interruption or reduction in 
supply of, any key components.  

Recruiting and retaining skilled personnel, especially in 
certain locations in which the Company operates, is highly 
competitive.  Recently, for example, recruiting of qualified 
engineers has been extremely competitive.  If the Company 
cannot successfully recruit and retain such skilled personnel, 
the Company's financial results may be adversely affected.

The Company is in the process of transitioning its 
manufacturing requirements planning, accounts payable, 
purchasing and intercompany accounting systems to a new set of 
applications which operate on a client server based platform.  
The third quarter of fiscal 1998 will be the first quarter in 
which some of the Company's major manufacturing sites utilize 
the new system.  As a result of the planned transition to the 
new client server platform, the Company may experience 
production, development, sales processing, financial system, 
or other disruptions, which may have an adverse financial 
effect on the Company.

Many computer systems were not designed with the year 2000 
issues in mind, and may require significant hardware and 
software modifications.  During the next few years, companies 
owning and operating such systems may plan to devote a 
substantial portion of their information systems' spending to
make such modifications and divert spending away from networking 
solutions.  This could have an adverse impact on the Company's 
sales and results of operations.  The Company believes the 
majority of its major systems are currently Year 2000 
compliant, and costs to transition the Company's remaining 
systems to Year 2000 compliance are not anticipated to be 
material.

The market price of the Company's common stock has been, and 
may continue to be, extremely volatile.  Factors such as new 
product, pricing or acquisition announcements by the Company 
or its competitors, quarterly fluctuations in the Company's 
operating results, challenges associated with integration of 
businesses and general conditions in the data networking 
market, such as a decline in industry growth rates, may have a 
significant impact on the market price of the Company's common 
stock.  These conditions, as well as factors which generally 
affect the market for stocks of high technology companies, 
could cause the price of the Company's stock to fluctuate 
substantially over short periods.

Because of the foregoing factors, as well as other factors 
affecting the Company's operating results, past trends and 
performance should not be presumed by investors to be an 
accurate indicator of future results or trends.


Liquidity and Capital Resources

Cash, equivalents and short-term investments at November 30, 
1997 were $1.1 billion, increasing $245.9 million from May 31, 
1997.

For the six months ended November 30, 1997, net cash generated 
from operating activities was $393.9 million.  Accounts 
receivable at November 30, 1997 decreased $87.7 million from 
May 31, 1997 to $908.4 million.  Days sales outstanding in 
receivables increased to 68 days at November 30, 1997, 
compared to 65 days at May 31, 1997 due primarily to a higher 
concentration of sales in the third month of the quarter ended 
November 30, 1997, compared to the third month of the quarter 
ended May 31, 1997.  Inventory levels at November 30, 1997 
increased $122.2 million, of which $120.1 million was finished 
goods, from the prior fiscal year-end to $636.0 million.  
Inventory turnover was 4.9 turns at November 30, 1997, 
compared to 6.4 turns at May 31, 1997, primarily as a result 
of the increase in the Company's inventory due to reduced 
sales levels, as previously discussed.

During the six months ended November 30, 1997, the Company 
made $211.2 million in capital expenditures.  Major capital 
expenditures included upgrades and expansion of the Company's 
facilities in the U.K., Santa Clara, California and Illinois 
and the continuing development of the Company's worldwide 
information systems.  As of November 30, 1997, the Company had 
approximately $170 million in capital expenditure commitments 
outstanding primarily associated with the construction and 
expansion of office and manufacturing space in Santa Clara, 
Illinois, the U.K., and Singapore.

During the first six months of fiscal 1998, the Company 
received cash of $234.1 million from the sale of approximately
20 million shares of its common stock to employees through its
employee stock purchase and option plans. These cash inflows
related primarily to the exercise of stock options by employees
of U.S. Robotics.  Pursuant to a change-in-control feature of the
U.S. Robotics' employee stock option plans, substantially all
outstanding options held by employees of U.S. Robotics became fully
vestedand exercisable upon closing of the merger in June 1997.  In 
addition, the Section 16(b) affiliates of both U.S. Robotics 
and 3Com were subject to restrictions on the sale of their 
shares because of the rules applicable to a pooling-of-
interests and such affiliate restrictions lapsed in September 
1997.

During the first quarter of fiscal 1998, the Company signed a 
lease, which replaces a previous land lease, for 300,000 
square feet of office and research and development space and a 
data center to be built on land adjacent to the Company's 
headquarters site.  The lease expires in August 2002, with an 
option to extend the lease term for two successive periods of 
five years each.  The Company has an option to purchase the 
property for $83.6 million, or at the end of the lease arrange 
for the sale of the property to a third party with the Company 
retaining an obligation to the owner for the difference 
between the sale price and $83.6 million, subject to certain 
provisions of the lease. Construction of the buildings began 
in July 1997, and the Company anticipates that it will occupy 
and begin lease payments in the second quarter of fiscal 1999.

During the first quarter of fiscal 1998, the Company signed a 
lease, which replaces a previous land lease, for 525,000 
square feet of office, research and development and 
manufacturing space to be built on land in Marlborough, 
Massachusetts.  The lease expires in August 2002, with an 
option to extend the lease term for two successive periods of 
five years each.  The Company has an option to purchase the 
property for $86.0 million, or at the end of the lease arrange 
for the sale of the property to a third party with the Company 
retaining an obligation to the owner for the difference 
between the sale price and $86.0 million, subject to certain 
provisions of the lease.  Construction of the buildings began 
in the first quarter of fiscal 1998, and the Company 
anticipates that it will occupy and begin lease payments in 
the third quarter of fiscal 1999.

During the first quarter of fiscal 1998, the Company signed a 
lease for an existing 400,000 square foot building and for 
100,000 square feet to be built on adjacent land in Rolling 
Meadows, Illinois.  The new and renovated facility will be 
used for research and development and office space.  The lease 
expires in September 2002, with an option to extend the lease 
term for two successive periods of five years each.  The 
Company has an option to purchase the property for $95.0 
million, or at the end of the lease arrange for the sale of 
the property to a third party with the Company retaining an 
obligation to the owner for the difference between the sale 
price and $95.0 million, subject to certain provisions of the 
lease.  The lessor began construction of the buildings in the 
second quarter of fiscal 1998, and the Company anticipates it 
will occupy and begin lease payments in the first quarter of 
fiscal 1999.

The three aforementioned leases require the Company to 
maintain specified financial covenants, all of which the 
Company was in compliance with as of November 30, 1997.

The Company has a $100 million revolving bank credit agreement 
which expires December 20, 1999.  Payment of cash dividends 
are permitted under the credit agreement, subject to certain 
limitations based on net income levels of the Company.  The 
Company has not paid and does not anticipate it will pay cash 
dividends on its common stock.  The credit agreement requires 
the Company to maintain specified financial covenants.  As of 
November 30, 1997, there were no outstanding borrowings under 
the credit agreement and the Company was in compliance with 
all required covenants. During the quarter ended August 31, 
1997, the Company repaid $168.1 million of short-term 
borrowings incurred by U.S. Robotics, which included $33.3 
million of borrowings that occurred between May 25 and June 
12, 1997. 

On December 23, 1997, the Company redeemed convertible 
subordinated notes totaling $110 million.  Under the terms of 
the agreement, the  Company paid cash of approximately $115 
million for principal, accrued interest and early payment 
penalties.

During the quarter ended August 31, 1997, the Company 
completed the merger transaction with U.S. Robotics.  As a 
result, the Company recorded merger-related charges of $269.8 
million.  The remaining merger-related accrual at November 30, 
1997 was approximately $162 million.  Total expected cash 
expenditures relating to the merger charge are estimated to be 
approximately $138 million, of which approximately $64 million 
was disbursed prior to November 30, 1997.  Termination 
benefits paid to 561 employees terminated through November 30, 
1997 (approximately 56 percent of the total planned 
severances) were approximately $30 million.  The remaining 
severance and outplacement amounts are expected to be paid 
within the next nine months.

Based on current plans and business conditions, the Company 
believes that its existing cash and equivalents, temporary 
cash investments, cash generated from operations and the 
available revolving credit agreement will be sufficient to 
satisfy anticipated operating cash requirements for at least 
the next twelve months.


Effects of Recent Accounting Pronouncements

In February 1997, the Financial Accounting Standards Board 
(FASB) issued Statement of Financial Accounting Standards No. 
128 (SFAS 128), "Earnings per Share."  This Statement 
establishes and simplifies standards for computing and 
presenting earnings per share.  SFAS 128 will be effective for 
the Company's third quarter of fiscal 1998, and requires 
restatement of all previously reported earnings per share data 
that are presented.  Early adoption of this Statement is not 
permitted.  SFAS 128 replaces primary and fully diluted 
earnings per share with basic and diluted earnings per share.  
Under SFAS 128, the Company's reported earnings per share for 
the three and six months ended November 30, 1997 and 1996 
would have been:

                    Three Months Ended     Six Months Ended
                       November 30,          November 30,
                     1997       1996       1997       1996
                     ----       ----       ----       ----

Basic              $  0.01    $  0.53    $ (0.14)   $  0.85
Diluted            $  0.01    $  0.49    $ (0.14)   $  0.79


In June 1997, the FASB issued SFAS 130, "Reporting 
Comprehensive Income."  This statement establishes standards 
for the reporting and display of comprehensive income and its 
components.  SFAS 130 will be effective for the Company's 
fiscal year 1999 and requires reclassification of financial 
statements for earlier periods for comparative purposes.

In June 1997, the FASB issued SFAS 131, "Disclosures About 
Segments of an Enterprise and Related Information." This 
statement requires that financial information be reported on 
the basis used internally for evaluating segment performance 
and deciding how to allocate resources to segments.  SFAS 131 
is effective for the Company's fiscal year 1999 and requires 
restatement of all previously reported information for 
comparative purposes.  




                       PART II.  OTHER INFORMATION


Item 1.	Legal Proceedings

The Company is a party to lawsuits in the normal course of its 
business.  The Company notes that (i) litigation in general 
and patent litigation in particular can be expensive and 
disruptive to normal business operations and (ii) the results 
of complex legal proceedings can be very difficult to predict 
with any certainty.


Securities Litigation

In December 1997 and January 1998, several putative 
shareholder class action lawsuits were filed against the 
Company and certain of its officers and directors in the 
United States District Court for the Northern District of 
Illinois and in the United States District Court for the 
Northern District of California.  The complaints allege 
violations of the federal securities laws, specifically 
Sections 10(b) and 20(a) of the Securities and Exchange Act of 
1934.  The complaints allege class periods between May 19, 
1997 and November 14, 1997 and do not specify the damages 
sought.  The Company believes it has meritorious defenses to 
the claims and intends to contest the lawsuits vigorously.  An 
unfavorable resolution of the actions could have a material 
adverse effect on the business, results of operations or 
financial condition of the Company.

U.S. Robotics, certain of its directors, and the Company were 
named as defendants in shareholder class actions relating to 
the merger between the Company and U.S. Robotics.  (In re: 
U.S. Robotics Corporation Shareholders Litigation, Delaware 
Chancery Court Consolidated Civil Action No.   15580). On 
October 7, 1997, all claims related to such suits were settled 
pursuant to a settlement approved by the Delaware Chancery 
Court.  Results of the settlement did not have a material 
effect on the Company's results of operations or financial 
condition.

On March 24, and May 5, 1997, putative shareholder class 
action lawsuits, entitled Hirsch v. 3Com Corporation, et al., 
Civil Action No. CV764977, and Kravitz v. 3Com Corporation, et 
al., Civil Action No. CV765962, respectively, were filed 
against the Company and certain of its officers and directors 
in the California Superior Court, Santa Clara County (the 
Superior Court).   Following resolution of a demurrer filed by 
the Company, the remaining causes of action in the  complaints 
allege violations of the state securities laws, specifically 
sections 25400 and 25500 of the California Corporations Code. 
The complaints, which cover a putative period of September 24, 
1996 through February 10, 1997, do not specify the damages 
sought. The Company believes it has meritorious defenses to 
the claims and intends to contest the lawsuits vigorously.  An 
unfavorable resolution of the actions could have a material 
adverse effect on the business, results of operations or 
financial condition of the Company.


Intellectual Property Litigation

In September 1997, Livingston Enterprises, Inc. (Livingston) 
filed suit against U.S. Robotics in the United States District 
Court for the Northern District of California (Livingston 
Enterprises, Inc. v. U.S. Robotics Access Corporation, Case 
No. C-97-3551(CRB)), claiming copyright infringement, 
misappropriation of trade secrets, breach of contract and 
unfair competition with respect to certain software code 
previously licensed to U.S. Robotics for incorporation in 
certain of its remote access server and concentrator products.  
Livingston seeks injunctive relief and damages that are not 
specified as to amount.  The Company believes it has 
meritorious defenses to Livingston's claims and intends to 
contest the lawsuit vigorously.  In September 1997, Livingston 
filed a separate action in the same federal court (Livingston 
Enterprises, Inc. v. U.S. Robotics Access Corporation, Case 
No. C-97-3487 (CRB)) seeking a declaratory judgment to the 
effect that one of U.S. Robotics' U.S. patent is invalid and 
not infringed by Livingston's products, as well as unspecified 
damages.  U.S. Robotics has answered this complaint and filed 
counterclaims alleging infringement of such patent by 
Livingston. An unfavorable resolution of the action could have 
a material adverse effect on the business, results of 
operations or financial condition of the Company.

On April 26, 1997, Xerox Corporation filed suit against U.S. 
Robotics in the United States District Court for the Western 
District of New York (Xerox Corporation v. U.S. Robotics 
Corporation and U.S. Robotics Access Corp., No. 97-CV-6182T), 
claiming infringement of one United States Patent.  The 
complaint alleges willful infringement and prays for 
unspecified damages and injunctive relief.  In a press release 
dated April 30, 1997, Xerox alleged that its patent, issued 
January 21, 1997, "covers the use and recognition of 
handwritten text using an alphabet system designed especially 
for reliable recognition in pen computers," and that Palm 
Computing Corporation's (Palm) PalmPilotTM hand-held computer 
and "Graffiti" software in its PalmTM operating system 
infringe the Xerox patent.  Palm is a wholly-owned subsidiary 
of the Company.  The Company believes it has meritorious 
defenses to Xerox's claims and intends to contest the lawsuit 
vigorously.  An adverse resolution of the action could have a 
material adverse effect on the Company's results of operations 
and financial condition in the quarter in which such adverse 
resolution occurs.

On February 13, 1997, Motorola, Inc. filed suit against U.S. 
Robotics in the United States District Court for the District 
of Massachusetts (Motorola, Inc. v. U.S. Robotics Corporation, 
et al., Civil Action No. 97-10339RCL), claiming infringement 
of eight United States patents.  The complaint alleges willful 
infringement and prays for unspecified damages and injunctive 
relief.  U.S. Robotics has filed an answer to Motorola's 
claims setting forth its defenses and asserting counterclaims 
which allege infringement of a U.S. Robotics patent, violation 
of antitrust laws, promissory estoppel and unfair competition.  
The Company believes it has meritorious defenses to the claims 
and intends to contest the lawsuit vigorously.  An unfavorable 
resolution of the action could have a material adverse effect 
on the business, results of operations or financial condition 
of the Company.


Consumer Litigation

During 1997, three putative class action lawsuits were 
filed against the Company or its subsidiary, U.S. Robotics in 
the state courts of California and Illinois.  Each of the 
actions seeks damages as a result of alleged 
misrepresentations by the Company or U.S. Robotics in 
connection with the sale of its new x2TM products and products 
upgradeable to x2 under various California and Illinois 
consumer fraud statutes and under common law theories 
including fraud and negligent misrepresentation.  Plaintiffs 
in Bendall, et al. v. U.S. Robotics Corporation, et al., (No. 
170441, Superior Court of Marin County, California), Lippman, 
et al v. 3Com, (No. 97 CH 09773, Circuit Court of Cook County, 
Illinois), and Michaels, et al. v. U.S. Robotics Access 
Corporation et al., (No. 94 CH 14417, Circuit Court of Cook 
County, Illinois) seek certification respectively of 
nationwide classes of purchasers of x2 technology during the 
approximate period November 1996 through at least May 1997.  
U.S. Robotics' motion to dismiss the Bendall action is 
presently pending; the Lippman action presently is stayed, and 
a responsive pleading is not yet due in the Michaels action.  
The complaints seek injunctive relief and an unspecified 
amount of damages.  Two other actions purporting to be brought 
in the public interest have also been filed against U.S. 
Robotics in state court in California under California 
statutes arising out of U.S. Robotics alleged 
misrepresentation in connection with the sale of the x2 
products.  Levy v. U.S. Robotics Corporation, (No. 170968, 
Superior Court of Marin County, California) and Intervention 
Inc. v. U.S. Robotics Corporation, (No. 984352, Superior Court 
of San Francisco, California) seek injunctive and unspecified 
monetary relief.  The Company believes it has meritorious 
defenses to these lawsuits and intends to contest the lawsuits 
vigorously. An unfavorable resolution of the actions could 
have a material adverse effect on the business, results of 
operations or financial condition of the Company.


Item 2.	Changes in Securities

	None.


Item 3.	Defaults Upon Senior Securities

	None.


Item 4.	Submission of Matters to a Vote of Security Holders

        (a)     The Annual Meeting of Shareholders was held on 
October 7, 1997.

        (b)     Each of the persons named in the Proxy Statement as 
a nominee for director was elected and the proposals listed 
below were approved.  The following are the voting results 
of the proposals:

Proposal I                      In Favor      Instructed      Withheld
----------                      --------      ----------      --------
Election of Directors          294,476,345        57,881     1,516,491

Proposal II                     In Favor       Opposed        Abstain
-----------                     --------       -------        -------
To approve an increase in
the share reserve under the
Company's 1983 Stock Option
Plan by 7,000,000 shares.      255,933,552    38,672,866     1,444,299

Proposal III                    In Favor       Opposed        Abstain
------------                    --------       -------        -------
To ratify the appointment
of Deloitte & Touche LLP
as the Company's independent
public accountants for the
fiscal year ending May 31,
1998                           294,752,931       510,203       787,583


Item 5.	Other Information

        None.


Item 6.	Exhibits and Reports on Form 8-K

        (a)     Exhibits

        Exhibit
        Number            Description
        ------            -----------

	3.1	Certificate of Incorporation (13)
        3.2     Certificate of Correction Filed to Correct a Certain Error
in the Certificate of Incorporation (13)
	3.3	Certificate of Merger (13)
	3.4	Bylaws of 3Com Corporation, As Amended (13)
        4.1     Indenture Agreement between 3Com Corporation and The First
National Bank of Boston for the private placement of convertible subordinated
notes dated as of November 1, 1994 (Exhibit 5.2 to Form 8-K) (6)
        4.2     Placement Agreement for the private placement of convertible
subordinated notes dated November 8, 1994 (Exhibit 5.1 to Form 8-K) (6) 
        4.3     Amended and Restated Rights Agreement dated December 31, 1994
(Exhibit 10.27 to Form 10-Q) (7)
        10.1    1983 Stock Option Plan, as amended (Exhibit 10.1 to Form
10-K) (3)*
	10.2	Amended and Restated Incentive Stock Option Plan (2)*
	10.3	License Agreement dated March 19, 1981 (1)
        10.4    First Amended and Restated 1984 Employee Stock Purchase
Plan, as amended (Exhibit 19.1 to Form 10-Q) (4)*
        10.5    Second Amended and Restated 1984 Employee Stock Purchase
Plan (Exhibit 10.5 to Form 10-Q)(8)*
        10.6    3Com Corporation Director Stock Option Plan, as amended
(Exhibit 19.3 to Form 10-Q) (4)*
        10.7    Amended 3Com Corporation Director Stock Option Plan
(Exhibit 10.8 to Form 10-Q)(8)*
        10.8    3Com Corporation Restricted Stock Plan, as Amended
(Exhibit 10.17 to Form 10-Q)(8)*
	10.9	1994 Stock Option Plan (Exhibit 10.22 to Form 10-K) (5)*
        10.10   Lease Agreement between BNP Leasing Corporation, as
Landlord, and 3Com Corporation, as Tenant, effective as of November 20, 1996
(Exhibit 10.37 to Form 10-Q) (10)
	10.11	Purchase Agreement between BNP Leasing Corporation and 3Com 
Corporation, effective as of November 20, 1996 (Exhibit 10.38 to Form 10-Q)
(10)
	10.12	Agreement and Plan of Reorganization among 3Com Corporation, 
OnStream Acquisition Corporation and OnStream Networks, Inc. dated as of 
October 5, 1996 (Exhibit 2.1 to Form S-4) (9)
        10.13   Lease Agreement between BNP Leasing Corporation, as Landlord,
and 3Com Corporation, as Tenant, effective as of February 3, 1997 for the
Combined Great America Headquarters site (Exhibit 10.19 to Form 10-Q) (12)
	10.14	Purchase Agreement between BNP Leasing Corporation and 3Com 
Corporation, effective as of February 3, 1997 for the Combined Great America 
Headquarters site (Exhibit 10.20 to Form 10-Q) (12)
        10.15   Credit Agreement dated as of December 20, 1996 among 3Com 
Corporation, Bank of America National Trust and Savings Association, as
Agent,and the Other Financial Institutions Party Hereto Arranged by BA
Securities, Inc. (Exhibit 10.21 to Form 10-Q) (12)
        10.16   Amended and Restated Agreement and Plan of Merger by and
among 3Com Corporation, TR Acquisitions Corporation, 3Com (Delaware)
Corporation, and U.S. Robotics Corporation, dated as of February 26, 1997
and amended as of March 14, 1997(11)
        10.17   Lease Agreement between BNP Leasing Corporation, as Landlord,
and 3Com Corporation, as Tenant, effective as of July 25, 1997 for the
Great America Phase III (PAL) site (13)
	10.18	Purchase Agreement between BNP Leasing Corporation and 3Com 
Corporation, effective as of July 25, 1997 for the Great America Phase III
(PAL) site (13)
        10.19   Lease Agreement between BNP Leasing Corporation, as Landlord,
and 3Com Corporation, as Tenant, effective as of July 29, 1997 for the
Marlborough site (13)
	10.20	Purchase Agreement between BNP Leasing Corporation and 3Com 
Corporation, effective as of July 29, 1997 for the Marlborough site (13)
        10.21   Lease Agreement between BNP Leasing Corporation, as Landlord,
and 3Com Corporation, as Tenant, effective as of August 11, 1997 for the
Rolling Meadows site (13)
	10.22	Purchase Agreement between BNP Leasing Corporation and 3Com 
Corporation, effective as of August 11, 1997 for the Rolling Meadows site
	10.23	First Amendment to Credit Agreement (13)

	*	Indicates a management contract or compensatory plan.

        (1)     Incorporated by reference to the corresponding Exhibit
previously filed as an Exhibit to Registrant's Registration Statement on
Form S-1 filed January 25, 1984 (File No. 2-89045)
        (2)     Incorporated by reference to Exhibit 10.2 to Registrant's
Registration Statement on Form S-4 filed on August 31, 1987 (File No.
33-16850)
        (3)     Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-K filed
on August 27, 1991 (File No. 0-12867)
        (4)     Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-Q filed
January 10, 1992 (File No. 0-12867)
        (5)     Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-K filed
on August 31, 1994 (File No. 0-12867) 
        (6)     Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 8-K filed
on November 16, 1994 (File No. 0-12867)
        (7)     Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-Q filed
on January 13, 1995 (File No. 0-12867)
        (8)     Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-Q, filed
on January 15, 1996 (File No. 0-12867)
        (9)     Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Registration
Statement on Form S-4, originally filed on October 11, 1996 (File No.
333-13993)
        (10)    Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-Q filed
on January 13, 1997 (File No. 0-12867)
        (11)    Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Registration
Statement on Form S-4, filed on March 17, 1997 (File No. 333-23465)
        (12)    Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-Q, filed
on April 11, 1997 (File No. 0-12867)
        (13)    Incorporated by reference to the Exhibit identified in
parentheses previously filed as an Exhibit to Registrant's Form 10-Q, filed
on October 14, 1997 (File No. 0-12867)


        (b)     Reports on Form 8-K

                None.




                                 Signatures




Pursuant to the requirements of the Securities Exchange Act of 
1934, the Registrant has duly caused this report to be signed 
on its behalf by the undersigned thereunto duly authorized.


                                 3Com Corporation
                                 (Registrant)



Dated: March 18, 1998            By: /s/ Christopher B. Paisley
       ---------------------         --------------------------
                                     Christopher B. Paisley
                                     Senior Vice President, Finance and
                                     Chief Financial Officer
                                     (Principal Financial and
                                     Accounting Officer)