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David Williams
Global Director of Sales, Research
David Williams
Global Director of Sales, Research
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Vendor M&A Frenzy: What Happens Next
The industrial logic for consolidation in the $50-billion-a-year cellular network equipment market has long been compelling. With too many vendors and fierce price-based competition, this huge market risks degenerating into a low-profit business, despite vast sums invested in research and development.

For various reasons some political, some cultural, but mostly commercial the market has not consolidated until now. In a chain events sparked in part by service provider consolidation in North America, this deadlock has been broken and the cellular infrastructure business is undergoing a deep restructuring process. A drop in profitability across the sector in the first half of 2006, combined with flat growth over the same period in 2005, is accelerating the process.

Achieving greater scale is the key objective. Scale speaks directly to a vendor's ability to invest in research and development, optimize the supply chain and manufacturing processes, achieve greater geographic diversity, and ultimately produce a profit.

This report analyzes vendor consolidation in the cellular infrastructure market, examines the trends driving M&A activity, and details the market share, market positioning, and future prospects of ten leading infrastructure vendors. This analysis is based on financial data released by vendors in quarterly and annual reports, in investor and analyst presentations, and in other public forums. It is supplemented by anecdotal information, which is used to make estimates of market sizes, shares, and growth rates.

Sample research data from the report is shown in the excerpts below:
Table of Contents (uni0906_toc.pdf)
The excerpt below shows post-M&A market share estimates for 2006, assuming zero annual growth over 2005. This growth assumption appears reasonable, given that the first half of 2006 was flat relative to the first half of 2005, at $25.7 billion. Note the concentration of market share among just three providers.
[click on the image above for the full excerpt]
Companies analyzed in this report include: Alcatel (NYSE: ALA); Ericsson AB (Nasdaq: ERICY); Huawei Technologies Co. Ltd; Lucent Technologies Inc. (NYSE: LU); Motorola Inc. (NYSE: MOT); NEC Corp. (Nasdaq: NIPNY; Tokyo: 6701); Nokia Corp. (NYSE: NOK); Nortel Networks Ltd. (NYSE/Toronto: NT); Siemens AG (NYSE: SI; Frankfurt: SIE); and Samsung Electronics Co. Ltd. (Korea: SEC).
Total pages: 22
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