Communications Equipment Manufacturers


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Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,100 communications equipment manufacturers in the US produce radio and TV broadcasting and wireless communications equipment, telephone apparatus, alarm system equipment, computer equipment and peripherals, electronic components, and software. Firms may also provide design, installation, maintenance, and repair services as well as contract manufacturing services. Distribution channels for communications equipment include wholesalers, retailers, resellers, third-party cellular network carriers, and system integrators.

Complex Supply Chain and Outsourcing

The supply chain in the communications equipment manufacturing industry is lengthy and complex and involves foreign sources and contract manufacturers.

Variable Costs

The cost of raw materials, components, and labor can vary and affect profitability for communications equipment manufacturers.

Industry size & Structure

The average communications equipment manufacturer employs 77-78 workers and generates $30-31 million annually.

    • The communications equipment manufacturing industry consists of about 1,100 firms that employ about 86,000 workers, and generates over $33 billion annually.
    • The industry is concentrated with the top 50 companies accounting for over 75% of industry revenue.
    • The communications equipment manufacturing industry overlaps with other industries. For example, electronic component manufacturer Amphenol produces antennas. Samsung, which makes consumer electronics, computers, and peripherals, also produces smartphones and telecommunications equipment. Other large companies that produce communications equipment include Apple, CommScope, and Motorola.
    • Defense work accounted for 6.7% to 15.9% of annual industry revenue between 2011 and 2021.
                              Industry Forecast
                              Communications Equipment Manufacturers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Nov 14, 2024 - AI Drives Data Center Building Boom
                              • Private construction spending on data centers has more than doubled what it was in late 2022, according to the US Census Bureau. Companies are investing in data centers to get ahead in artificial intelligence, according to Bloomberg. Communications equipment manufacturers are likely to benefit from increasing data center construction. Private construction spending on data centers has surged close to $30 billion a year.
                              • Americans used just over 100 trillion megabytes of wireless data in 2023, up 36% over the prior year in the largest single-year increase in wireless data consumption, according to wireless industry association CTIA, which represents major wireless carriers like Verizon, AT&T, T Mobile, and many technology firms. The increase -- 26 trillion MBs over 2022 -- comes as a growing number of 5G wireless devices are being used, according to CTI. The share of adults who reported using the internet increased from 86% in 2015 to 95% in 2023, according to the Pew Research Center.
                              • The burden of the Secure and Trusted Communications Networks Act (aka the Huawei rip & replace program) has fallen disproportionately on smaller carriers, which relied more on the cheaper gear from the Chinese firms than large companies like AT&T and Verizon, according to the Federal Communications Commission (FCC). Some smaller wireless companies now say they may not be able to upgrade their networks and continue serving their communities, where they are often the only internet providers. US Senator Deb Fischer introduced legislation to close the gap in rip-and-replace funding for carriers. Passing it will be challenging, with similar legislation failing twice over the past year. Congress only appropriated $1.9 billion to fund the program but the cost has exceeded $5 billion, according to the FCC.
                              • Communications equipment manufacturing industry employment and average wages for nonsupervisory employees decreased slightly during the first nine months of 2024, according to the BLS. Communications equipment manufacturing firms moderately increased their prices during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Communications equipment manufacturer sales are forecast to grow at a -1.56% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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