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Integrated
Electronic Enclosure Packaging: Frames, Cabinets, and Racks for Telecom
Equipment
2001-2006
a market research report
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The US telecommunications
industry is experiencing one of the worst slumps in its history.
Order terminations, buildout cancellations, bankruptcies, collapsing
stock prices, deteriorating margins, and questionable business
practices have left the euphoria felt by the industry little more than
a year ago in tatters. Major companies now expect the current
industry malaise to persist throughout the remainder of 2002.
How did this happen?
What further ripple effects could occur throughout the industry?
Most importantly, what can firms do to navigate safely through these
rough waters? Integrated Electronic Enclosure Packaging
examines these issues and others from the perspective of the
integrated electronic enclosure packaging (IEEP) suppliers—one of
several functional common core component sectors that collectively
underpin the entire telecommunications industry.
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Report Excerpt
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The Crash of 2000-2001
During the mid-to-late 1990s, the
telecommunications industry exhibited an economic growth rate few other
industries could match. Beginning in the third quarter of 2000, however,
the optimistic outlook of the e-business and communications sectors
abruptly changed. There was a realization that Wall Street expectations
for communications companies were becoming extravagant, and that credit
and capital financing were a bit too easy to find. In addition, booked
orders were excessive, business practices were lax, and inventories were
allowed to grow to unacceptable levels. The failure of many dot coms,
Internet service providers (ISPs), competitive local exchange carriers (CLECs),
and data local exchange carriers (DLECs) led to declining demand for
computers and networking infrastructure. These cutbacks forced
established carriers like AT&T and MCI WorldCom to limit their own
spending plans and set the stage for the current downturn. How severe is
this downturn?
The facts of the previous year paint a
grim picture:
- The Wall Street Journal (July 25,
2001) stated that in March 2000, the telecom equipment and service
providers had combined market caps totaling $2.7 trillion; by July
2001, this number was down to $1 trillion. The decline in the
valuation of the overall telecom sector has yet to stabilize.
- According to Economy.com, the fall in
telecom equipment spending accounted for almost one quarter of the
drop in economic growth from the first half of 2000 to the first
half of 2001.
- Brokerage Grubb & Ellis Co.
estimated that during the boom years of the late 1990s, real estate
developers built more than 50 million square feet of carrier hotel
space; 39 percent of that space was vacant at the end of June
2001.
The downturn is having a ubiquitous
effect on the telecom industry, stinging service providers and equipment
manufacturers alike. According to Challenger, Gray & Christmas Inc.,
a Chicago-based outplacement firm, total job cuts in the telecom
industry during 2001 weighed in at 317,777, significantly more than any
other industry and more than three times the total of the
highly-publicized job cuts in the dot-com industry (100,925). Telecom
job cuts in 2001 were nine times greater than in 2000, and the 2001
number also represents the highest one-year total for any industry since
the firm began tracking job cuts in 1993. Almost two million people
remain currently employed in telecommunications; three quarters by
service providers, one quarter by manufacturers.
Integrated Electronic Enclosure
Packaging Industry Overview
In a typical network operator's equipment
facility, there is a considerable amount of distribution frames,
enclosures, and racks assembled to hold communications equipment and
apparatus. Table I-1 lists the major IEEP components.
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Type
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Function
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Distribution
Frame
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A common wire and cable termination point for all transmission and
switching facilities installed in the CO.
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Equipment
Rack & Enclosure
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An open or closed metal enclosure to house “rack and stack”
equipment (e.g., servers, computers) and communications equipment
(e.g., add/drop multiplexers, modem banks, DSLAMs, digital loop
carriers, and channel banks).
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Cable
Racks
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Metal racks that permit the laying and dropping of unsightly
cables and wiring harnesses.
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Electrical
Enclosure
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A metal enclosure that houses AC and DC power systems and power
strips that directly power the telco equipment.
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Cross-Connect
Frame
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A metal frame that contains all the wire and cable terminations to
provide a service. Individual wires are joined together
(cross-connected) by a jumper device.
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Wall
Mount Enclosure
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Designed to use less floor space than conventional racks and
cabinets for housing servers, computers, etc.
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Data
Cabinet
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A small enclosure used to house and secure servers, computers,
etc.
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Insight's forecasts segment IEEP revenues
by:
- North America (also segmented into US
revenue),
- Europe, Middle East, and Africa (EMEA);
- Central America and Latin America (CALA);
and
- Asia Pacific (Australia to
Vietnam).
The international markets account for a
larger proportion of the integrated electronic enclosure packaging
sector's revenue than the North American market does in 2002. North
American IEEP revenue in 2002 will reach $990 million, while revenue for
the international markets will reach more than $1 billion. Although IEEP
revenue in North America and most international markets will remain
relatively flat through 2006, Insight's forecasts highlight those
international markets that will present opportunities for growth over
the forecast period.
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Market Segmentation
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- US Telecom Components
Revenue, IEEP vs. Other Segments
- Worldwide Integrated
Electronic Equipment Packaging Revenues
- North America (USA and
Canada)
- Europe, Middle East, and
Africa (EMEA)
- Asia Pacific (Australia
to Vietnam)
- Central America and
Latin America (CALA)
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1 The Crash of 2000-2001
1.2 Integrated Electronic Enclosure Packaging Industry Overview
1.3 Key Success Factors for IEEP Suppliers
Chapter II
MARKET OVERVIEW
2.1 Definitions and Background
2.1.1 AT&T Establishes Design and Engineering Standards
2.1.2 Western Electric and Bellcore
2.1.3 AT&T's Bell System Specifications
2.1.3.1 New Equipment Building Systems Standards
2.1.3.2 Bellcore Updates NEBS
2.1.4 Role of Functional Common Core Components
2.2 Integrated Electronic Enclosure Packaging Overview
2.2.1 Typical IEEP Configurations
2.2.2 Distribution Frames, Racks, and Enclosures
Chapter III
INDUSTRY TRENDS AND CHARACTERISTICS
3.1 Historical Evolution of the Market
3.1.1 The Monopoly Environment
3.1.2 The Emergence of Local Competition
3.1.3 Navigating Current Market Uncertainty
3.2 Factors Influencing New Product Acceptance
3.2.1 Technological Rate of Change
3.2.2 Standardization Process
3.2.3 Economic Reasons for Deploying New Technologies
3.3 Co-Location Trends
3.3.1 Mandated Co-Location Requirements
3.3.2 Effects on IEEP Firms
3.4 Challenges Posed by Industry Slowdown
3.4.1 Impacts on EMS Suppliers
3.4.2 Impacts on IEEP Suppliers
3.5 Shifts in Marketing Focus
3.5.1 Historical Marketing Focus
3.5.2 Transformations in Marketing Strategy
3.5.3 Various Distribution Channels
3.5.3.1 Wholesale Distribution
3.5.3.2 Direct Sales
3.5.4 The Typical Purchasing Process
3.5.5 New Marketing Avenues and Promotional Events
3.6 Supply Chain Structure
3.6.1 Supply Chain Components
3.6.2 Traditional vs. Improved Supply Chain Interactions
3.6.3 Web-Based Transactions
3.7 Support Services for Procurement
3.7.1 Program Management
3.7.2 Key Account Support Programs
Chapter IV
VENDORS
4.1 Introduction
4.2 Electronics Manufacturing Services Firms
4.3 Integrated Electronic Enclosure Packaging Firms
Chapter V
FUTURE TRENDS AND OPPORTUNITIES
5.1 Key Challenges
5.2 Meeting Support Requests of Providers
5.2.1 Scarcity of Qualified Personnel
5.2.2 Functional Support Services
5.3 The Move Toward Outsourcing
5.3.1 Manufacturing Outsourcing
5.3.2 Logistics Outsourcing
5.4 Integrated Electronic Enclosure Packaging Trends
5.5 Service Provider-Specific Opportunities
5.5.1 CO Growth-on-Demand
5.5.2 Greenfield Locations
5.5.3 Co-Location
5.5.4 Carrier Hotels
Chapter VI
INDUSTRY FORECAST
6.1 Introduction
6.2 Methodology
6.3 US Economic Outlook
6.4 General Trends
6.5 Forecasts
Appendix
GLOSSARY
Table
of Figures
Chapter I
I-1 IEEP Revenue, North America vs. Rest of World, 2002
($Millions)
Chapter II
II-1 The Role of Functional Common Core Components within a Central
Office
II-2 Next-Generation CO Switch: Integrated Electronic Enclosure
Packaging Configuration
II-3 Four-Bay DSLAM: IEEP Configuration (Front View)
Chapter III
III-1 Proposed Multi-Tenant Building Specification: Conceptual
Layout
III-2 Multi-Tier Distribution Channel Used by Functional Common Core
Component Firms
III-3 Supply Chain Management Framework
III-4 A Typical Program Management Model
Chapter VI
VI-1 US Telecom Components Revenue, IEEP vs. Other Segments,
2001-2006 ($Millions)
VI-2 US Integrated Electronic Equipment Packaging Revenue, 2001-2006
($Millions)
VI-3 Integrated Electronic Equipment Packaging Revenues by Region,
2001-2006 ($Millions)
Table
of Tables
Chapter I
I-1 Different Types of Integrated Electronic Enclosure Packaging
Equipment
I-2 Key Elements for Success of Integrated Electronic Enclosure
Packaging Firms
Chapter II
II-1 Updates to Original NEBS Specifications
II-2 Different Types of Integrated Electronic Enclosure Packaging
Equipment
II-3 Typical Configuration Components for a Next-Generation CO Packaged
Switch
II-4 Typical Configuration Components for a Four-Bay DSL Access
Multiplexer
Chapter III
III-1 Critical Issues for the IEEP Industry
III-2 Representative North American Telecommunications Standards
Organizations
III-3 Proposed Specifications for Multi-Tenant Building Telecom
Equipment Rooms
III-4 CLEC Co-Location Demands
III-5 Advanced Services Order Co-Location Requirements
III-6 Key Near-Term Challenges Facing Network Operators
III-7 Products Manufactured by EMS Firms
III-8 Typical Companies Outsourcing Manufacturing to EMS Firms
III-9 Strategic Goals for EMS Acquisitions of IEEP Firms
III-10 EMS Acquisitions of Integrated Electronic Enclosure Packaging
Suppliers
III-11 Purchasing Criteria of Typical Customer Types
III-12 Key Criteria Considered by Service Providers When Selecting a
Vendor
Chapter IV
IV-1 Strategic Acquisition Objectives for Functional Common Core
Component Suppliers
Chapter V
V-1 Functional Support Services Offered to Network Operators
V-2 Potential Benefits and Problems of Outsourcing Manufacturing and
Logistics
V-3 Outsourcing Vendor Capabilities Checklist
V-4 Key Value-Added Services for Electronic Enclosure Packagers
Chapter VI
VI-1 Worldwide Integrated Electronic Equipment Packaging Revenues,
2001-2006 ($Millions)
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Pricing Information
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Hard Copy Price
$ 600
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(PDF
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$ 870 Single-User Printable PDF
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