Companies in this industry make equipment used in telephone, data, radio and TV broadcast, and wireless communications networks. Major companies include Apple, Cisco Systems, and QUALCOMM (all based in the US), as well as Ericsson (Sweden), Huawei (China), Lenovo (Hong Kong), Nokia (Finland), Samsung (South Korea), and ZTE Corporation (China).
Global spending on telecommunications equipment is about $345 billion, according to Forrester Research. Emerging markets are fast becoming centers for telecommunications equipment manufacturing, because of both low labor costs and technological advances. Growth in spending is driven by the build-out of high-speed 4G mobile broadband networks. Countries with large populations and limited 4G coverage include Brazil, India, Indonesia, and the Philippines.
The US telecommunications equipment manufacturing industry includes about 1,400 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $38 billion.
The industry depends on purchases from businesses, telephone companies, cable companies, data communications providers, and TV and radio broadcasters. Profitability for individual companies is linked to technical innovation and the ability to secure high-volume contracts from large customers. Small companies can be successful if they make highly specialized products. There are large economies of scale in manufacturing standard products, but many products are specialized and produced in small manufacturing plants. The US industry is concentrated: the 50 largest companies generate about 75% of revenue.
Large US manufacturers have production facilities in lower-cost countries such as China, India, Malaysia, and Mexico. Imports make...