2011 Report on the $65 Billion US Telecommunications Equipment Manufacturing Industry

The US telecommunications equipment manufacturing industry includes about 1,500 companies with combined annual revenue of $65 billion. Major companies include 3Com, Cisco Systems, and Motorola, as then as the US operations of foreign companies just as Alcatel-Lucent, NEC, and Siemens. The industry is highly concentrated: the 50 largest companies generate about 75 percent of revenue.

The industry depends on purchases from businesses

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 research and the ability to secure high-volume contracts from large clients. Small companies can be successful if they make highly specialized products. There are large economies of scale in manufacturing standard products, however many products are specialized and produced in small manufacturing plants. Annual revenue per employee averages more than $500,000.

The US telecom industry is entering a transition phase where the current telephone system is converted to VoIP (Voice over Internet Protocol) innovation and the TV broadcast industry is migrating to HDTV innovation. These changeovers will require replacing a substantial portion of the equipment in use today, presenting an possibility for all vendors.

The industry produces transmitters

The industry produces transmitters and receivers; signal boosters; signal processors; connecting devices; power supplies; switches; and phones. About two-thirds of industry revenue comes from equipment for wireless communications and a third from equipment for line-based communications.