Shift of power in telecom makers's ranks

The top eight telecommunications equipment manufacturers in 2000 remained the same as in 1999, but increasingly diverging strategies resulted in a shifting of the rankings, according to Dataquest. While nearly all of the top-tier vendors experienced double-digit growth in 2000, they will face increased challenges in 2001, a Dataquest spokesman claimed.

Whether there is an actual recession or not, there will be a paring back in 2001. Dataquest expects slowing demand for services; reduced and delayed investments in networks and applications; patching rather than overhauling or replacement of enterprise networks; and the disappearance of some customers.

Ericsson moved into the No. 1 position after four years as the No. 2 vendor, based largely on its strength in mobile networks during a year of significant investment in third-generation (3G) systems. Nortel moved from the No. 3 position in 1999 to the No. 2 position in 2000, and Dataquest analysts noted that Nortel had a great balance of leading edge technology skills and executed well in the high-growth optical market.

Nokia had strong growth based on its mobile terminal business in 2000, but Dataquest said growth is likely to soften over the next few years. A major reason for Lucent's slide from the No. 1 to the No. 4 spot was the spinning off of Avaya, although it still had a difficult year. Cisco had the strongest growth among the top eight vendors, but Dataquest analysts warn that growth for the company will not continue at the same rate in its core businesses. The company will need to modify its strategy if it is to continue its strong growth rates.

Motorola benefitted from its mobile legacy in 2000, but it is losing share in key competitive markets. It has positions in cable infrastructure and low-end data products, but it will be difficult to see its breakout strategy as the mobile segment softens. For Alcatel, DSL has been a major weapon, but recently announced core routing and optical products will help. Siemens slipped from the No. 5 spot in 1999 to the No. 6 position in 2000 after it went through a major restructuring intended to sharpen its focus on its operator and mobile businesses.

With the tough times expected this year, the slowing economy and the recent struggles in the dot-com industry will make 2001 a turbulent year in the telecommunications industry.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about Alcatel-LucentDataquestEdge TechnologyEricsson AustraliaLucentMotorolaNokiaSiemens

Show Comments