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 84,500 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

                              May 11, 2024 - Sales Decrease
                              • Firms slightly increased their prices during 2023, according to the US Bureau of Labor Statistics (BLS). Industry employment increased slightly during 2023 while average wages for nonsupervisory employees decreased significantly, according to the BLS. Communications equipment manufacturer sales are forecast to grow at a -1.17% compounded annual rate from 2023 to 2027, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
                              • Nearly 40% of US telecom companies getting federal support to remove equipment made by Chinese telecoms firms Huawei and ZTE need additional government funding, according to the Federal Communications Commission (FCC). Removing the equipment from American wireless networks to address security risks is estimated to cost $4.98 billion but Congress has only approved $1.9 billion for the "rip and replace" program. The Bident administration sought another $3.1 billion in October 2023 to further fund removal of equipment made by Chinese telecoms giants but Congress has not acted.
                              • Heightened geopolitical sensitivity could near- or re-shore manufacturing of $25 billion in communications equipment for North American networks, according to Bloomberg. The region accounts for 27-28% of the $91-$92 billion global market, which should grow in line with gross domestic product. Nokia, Adtran, and Calix are among the companies committed to building gear in the US, responding to the Build America, Buy America Act to participate in the country’s $42 billion Broadband Equity Access Deployment program. The act requires 55% of components to be sourced in the US, rising to 75% by 2029.
                              • 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.
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