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Computer Networking Equipment Manufacturing
First Research, March 2012, Pages: 10
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Executive Summary
Brief Excerpt from Industry Overview Chapter:
The US computer networking equipment industry includes about 1,000 companies with combined annual revenue of $50 billion. Major companies include Brocade Communications, Cisco Systems, Extreme Networks, and Juniper Networks. The industry is highly concentrated: the 50 largest companies generate about 90 percent of revenue.
The global computer networking equipment industry generates more than $100 billion in revenue a year. Major global companies include Alcatel-Lucent, Fujitsu, NEC, and Siemens. While production is concentrated in the Asia/Pacific region, emerging markets such as Africa, Latin America, and Eastern Europe offer growth potential for manufacturers.
COMPETITIVE LANDSCAPE
Demand is driven by economic growth as enterprises and service providers expand networks to meet increasing user needs, and by the superior performance of new equipment, which encourages replacement of existing equipment. Profitability of individual companies depends on timely development and delivery of products in high volumes for large customers. Large companies have advantages in economies of scale in broad product offerings and services. Small companies can successfully compete by designing and developing products that meet highly specialized needs. The industry is capital-intensive: average annual revenue per employee is $1.8 million.
The US telecommunication industry is in transition: the current telephone backbone network is being converted from circuit-switched to multimedia networks combining voice, data, and video over high-speed links. This transition will require replacing a substantial portion of equipment, presenting an opportunity for all equipment vendors....
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