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EMS Providers Target ``Blazing'' Communications Industry.

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As dependence upon communication electronics increases, end-user applications are expected to sustain dynamic growth in the electronics manufacturing service (EMS) industry.

With an increasingly global marketplace, the communications industry (telecom and datacom) is creating huge business opportunities for EMS companies.

According to new strategic research from Frost & Sullivan ( ), the "North American Electronics Manufacturing Service Provider Industry for the Communications Sector Publication" states that the market generated $11.83 billion in 1999 (for the specific applications outlined in the report), and a robust growth rate is forecasted through 2006.

"EMS providers are rapidly becoming equipped to provide services at a lower cost than most original equipment manufacturers (OEM) can provide for themselves," says Frost & Sullivan analyst Adam Fries. As a result, many OEMs are accepting outsourcing as a viable business model."

Telecom firms that have not traditionally outsourced services are realizing that to remain competitive, they need to delegate their manufacturing operations. OEMs are realizing that focusing on core competencies, such as marketing or research and development will have a beneficial impact on their business and many have already divested themselves of substantial amounts of manufacturing functions.

"For EMS firms, OEM acquisitions are a quick and efficient way to increase manufacturing capacity and generate new business," says Fries.

Furthermore, EMS firms are focusing on managing information flows by implementing IT systems and advancing their supply chain capabilities. Optimizing the supply chain will give companies new ways to reduce expenditures. Since the industry currently operates under thin net margins, perpetual efficiency is key to remaining competitive because datacom and telecom OEMs are expected to continue to push prices downward and demand additional services.

Effective IT systems and supply chains are forecast to help EMS firms distinguish themselves from their competitors. However, as the industry becomes increasingly competitive, differentiation is becoming harder for EMS organizations.

Frost & Sullivan presents the 2000 Marketing Engineering Awards to companies that have worked hard to make a positive contribution to the EMS provider industry. The 2000 Market Engineering Competitive Strategy Award is presented to Solectron, and the 2000 Market Engineering Customer Service Leadership Award is given to Celestica.

Companies participating within this industry are: 3Com, ACT Manufacturing Inc., AdC Telecommunications, Aimtronics, Alcatel, AMD, Benchmark Electronics Inc., Celestica Inc., Circuit Service Inc., Cisco Systems, C-MAC Industries Inc., Colt Technology Corporation, DII Group Inc., Elamex S.A. de C.V., Ericsson, Flextronics International, IBM, IEC Electronics Corporation, Isis, Jabil Circuit Company, K-Byte Manufacturing, Kimball Electronics Group, K-Tec Electronics Inc., Lucent Technologies, Mack Technologies Inc., Manufacturers' Services Ltd., MATCO Electronics Group, Mid-South Industries, Motorola, Nortel Networks, Pemstar Inc., Plexus Corporation, Qualcomm, Sanmina Corporation, SCI Systems Inc., Siemens AG, SMT Centre Inc., Solectron Corporation, SpectraLink and Sun Microsystems.

Frost & Sullivan, which is headquartered in Mountain View, Calif., is a global leader in international marketing consulting and training. Frost & Sullivan monitors the EMS provider industry for market trends, market measurements and strategies. This ongoing research complements the "Electronic Components & Semiconductors Custom Subscription." Free executive summaries of both reports are available to the press.

Along with publishing in-depth market consulting reports, Frost & Sullivan also provides custom consulting needs to a variety of national and international companies.

"North American EMS Provider Industry for the Communication Sector" Report: 7227-28 Publication Date: March 2000 Price: $3,950
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Publication:Business Wire
Date:Feb 22, 2000
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