Cisco Systems - Competitors

Cisco Systems Competition

Now Viewing Cisco Systems's competition in: Telecommunications Equipment Manufacturers

Recent Developments

Economic Weakness Concerns for Industry - Telecom equipment manufacturers are concerned about how increasing US economic weakness will impact the industry. Motorola's CEO says that he's watching the broader economy to see if it chills demand for cellular handsets. Other segments of the industry are of less concern as investment and upgrades by telecom providers are sustaining strength in the connected homes business, and government and large corporate businesses have been unaffected by the economic slowdown.

Progress in Key Legal Dispute - A court case that could have major implications for the wireless industry is moving closer to trial as Qualcomm and Nokia move toward agreement on procedural issues, according to <em>The Wall Street Journal</em>. Nokia and other cell phone makers claim that patent royalties paid to Qualcomm under a 2001 patent-licensing agreement that expired in 2007 are excessive. Industry experts say that the royalty payment rates may impact the cost of equipment used to provide third-generation (3G) cellular network services. The trial may begin as early as July 2008 if a procedural agreement is reached.

Demand for Rich Media Content Increasing - The combination of greater 3G adoption and a marked increase in rich media, made-for-mobile content will drive mobile entertainment revenues to $47.5 billion by 2010, according to Juniper Research, benefiting telecom equipment manufacturers due to the increased demand for bandwidth such media are likely to cause. Usage patterns are changing rapidly with the increasing availability of more sophisticated and attractive content designed for the mobile environment, according to Juniper Research.

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. Annual revenue per employee in a large plant varies from $500,000 to $1 million.

Full Industry Overview For Telecommunications Equipment Manufacturers

Telecommunications Equipment Manufacturers Industry Forecast

from Hoover's/D&B subsidiary First Research

The output of US communication equipment manufacturing is forecast to grow at an annual compounded rate of 2 percent between 2007 and 2012.

Communication Equipment Production Growth Low After Spike

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.