Canadian manufacturers have been slow to embrace R&D trends
Los Angeles, CA (PRWEB) December 04, 2013
The Communication Equipment Manufacturing industry suffered from the recession and has been slow to take advantage of the global restructuring trend that has been defining electronic manufacturing industries over the past five years. The Communication Equipment Manufacturing industry manufactures radio and TV broadcasting equipment, as well as wireless communications equipment, such as cell phones. As consumer spending, especially on discretionary products, fell during the recession, so did purchases of industry products. Decreased spending combined with the release of the popular Apple iPhone, a strong competitor, hampered industry growth. Over the five years to 2013, revenue increased at a slow rate of 0.3% to $5.2 billion, increasing 5.9% in 2013 as a result of the post-recession rebound.
According to IBISWorld Industry Analyst Sarah Kahn, “Falling revenue and profit margins during the recession have created a global trend of geographic specialization, moving the production of reduced value goods that require low-skilled workers overseas.” Research and Development (R&D) and the manufacturing of high-end products require high-skilled workers that demand higher wages and have been kept domestic. However, Canadian manufacturers have been slow to embrace this movement and have suffered as a result, with profit margins falling in the five years to 2013.
Nevertheless, in the five years to 2018, companies are expected to embrace this trend and outsource low-skilled manufacturing activities to countries with lower wages, boosting industry revenue. Imports, especially from China, the sole manufacturer of the most popular smartphone, have been rising at rate of 4.0% to $5.5 billion from 2008 to 2013, and are expected to continue growing in the next five years. Exports, negatively impacted by the Canadian-dollar exchange rate, have become more expensive in foreign markets, decreasing at an annual rate of 11.1% to $1.9 in the five years to 2013. This movement is expected to continue, albeit at a much slower rate, over the next five years.
“Quality innovation, stimulated by increasing demand from wireless telecommunication carriers that are responding to the need for wireless products that allow for high speed internet image and data transfer capabilities, is expected to drive industry revenue in the five years to 2018,” says Kahn. Revenue is expected to climb as industry players become more efficient, outsourcing low-skilled work and investing in R&D.
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IBISWorld industry Report Key Topics
Operators in this industry primarily manufactures radio and television broadcasting, as well as other wireless communications equipment such as antennas, set top boxes, GPS systems, cell phones, satellite uplink technologies and broadcasting equipment. This industry does not include the manufacturing of intercommunications equipment or household audio and video equipment.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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