Telecommunications Equipment Manufacturing
Description
Companies in this industry make equipment used in telephone, data, radio and TV broadcast, and wireless communications networks. Major companies include Apple, Cisco, and Qualcomm (all based in the US), as well as Ericsson (Sweden), Huawei and ZTE Corporation (both based in China), Nokia (Finland), and Samsung (South Korea).
Global spending on information technology is forecast to reach about $5.61 trillion in 2025, according to Gartner. Further, communication services remain the key driver in the industry growth at about $1.42 trillion of total spending.
The US telecommunications equipment manufacturing industry includes about 1,300 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $35 billion.
COMPETITIVE LANDSCAPE
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.
PRODUCTS, OPERATIONS & TECHNOLOGY
About 50% of US industry revenue comes from communication systems and equipment, including GPS. This is followed by products including data communications equipment (about 15%), and wireless networking systems (about 10%). Other products include alarm systems, broadcast, studio, and related electronic equipment, and radio station equipment (about 20%).
The industry's products are used by multiple communications networks, including radio and TV broadcasting, microwave communications, remote alarm systems, wired and wireless telephone, cable TV, and data communications (including the internet). The number of products is large because communications signals can be sent in different forms (electrical, optical, electromagnetic); at different frequencies, in different modulations (AM or FM); and in different modes (digital or analog). Signals can also be composed and processed in many different ways (CDMA, GSM, ATM, circuit-switching, packet-switching, etc.).
Many telecom products are electronic devices assembled from standard components (such as computer chips and circuit boards) that are customized for a particular application. Production facilities are often highly automated. Systems are designed to be highly modular, consisting of cabinets, shelves, and boards. Large, expensive pieces of equipment may be assembled by hand from pre-built components. Parts are typically purchased from multiple electronic component suppliers.
Outsourcing has become pervasive in telecommunications manufacturing. Specialized chips may be shipped to companies fabricating circuit boards and then shipped to other vendors doing the final assembly and test. Many large manufacturers outsource some or all of the actual manufacturing to contract manufacturers.
Global spending on information technology is forecast to reach about $5.61 trillion in 2025, according to Gartner. Further, communication services remain the key driver in the industry growth at about $1.42 trillion of total spending.
The US telecommunications equipment manufacturing industry includes about 1,300 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $35 billion.
COMPETITIVE LANDSCAPE
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.
PRODUCTS, OPERATIONS & TECHNOLOGY
About 50% of US industry revenue comes from communication systems and equipment, including GPS. This is followed by products including data communications equipment (about 15%), and wireless networking systems (about 10%). Other products include alarm systems, broadcast, studio, and related electronic equipment, and radio station equipment (about 20%).
The industry's products are used by multiple communications networks, including radio and TV broadcasting, microwave communications, remote alarm systems, wired and wireless telephone, cable TV, and data communications (including the internet). The number of products is large because communications signals can be sent in different forms (electrical, optical, electromagnetic); at different frequencies, in different modulations (AM or FM); and in different modes (digital or analog). Signals can also be composed and processed in many different ways (CDMA, GSM, ATM, circuit-switching, packet-switching, etc.).
Many telecom products are electronic devices assembled from standard components (such as computer chips and circuit boards) that are customized for a particular application. Production facilities are often highly automated. Systems are designed to be highly modular, consisting of cabinets, shelves, and boards. Large, expensive pieces of equipment may be assembled by hand from pre-built components. Parts are typically purchased from multiple electronic component suppliers.
Outsourcing has become pervasive in telecommunications manufacturing. Specialized chips may be shipped to companies fabricating circuit boards and then shipped to other vendors doing the final assembly and test. Many large manufacturers outsource some or all of the actual manufacturing to contract manufacturers.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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