I. Current Status of the Network Equipment Supply Chain
1. Regional Distribution
The global network equipment supply chain is predominantly concentrated in the following regions:
– North America: The United States hosts the world’s largest network equipment market, featuring renowned manufacturers such as Cisco, Juniper, and Arista.
– Europe: Europe is home to leading network equipment suppliers like Huawei, Ericsson, and Nokia.
– Asia: China boasts major network equipment manufacturers such as Huawei and ZTE, along with Japanese and South Korean enterprises like Fujitsu and NEC.
2. Types of Manufacturers
Network equipment suppliers fall into two main categories:
– Original Equipment Manufacturers (OEM): These companies have in-house research and development as well as production capabilities, examples include Cisco, Huawei, and Juniper.
– Original Design Manufacturers (ODM): ODMs provide design and manufacturing services to OEMs, such as Quanta and Wistron.
3. Types of Products
The network equipment supply chain encompasses various product types:
– Network Switches: Facilitate connectivity between different network devices for data forwarding.
– Ethernet Cards: Connect computers to networks.
– Ethernet Modules: Connect fiber optics or copper cables to network devices.
– Network Security Hardware: Protects networks from cyber threats.
– Wireless Testing Devices: Evaluate the performance and security of wireless network devices.
II. Trends in the Network Equipment Supply Chain
1. Regionalization
Due to trade tensions and geopolitical factors, the network equipment supply chain is showing a trend towards regionalization. For example, the United States and China are building their regional supply chain systems.
2. Virtualization and Cloudification
With the widespread adoption of network virtualization and cloud computing technologies, the network equipment supply chain is moving towards virtualization and cloudification.
3. Artificial Intelligence and Big Data
The application of artificial intelligence and big data technologies in the research, production, and operation of network equipment is enhancing the efficiency and intelligence of the supply chain.
III. Considerations for Procuring Network Equipment
1. Needs Analysis
– Technical Specifications: Compare technical specifications of products from different manufacturers and select those meeting specific requirements.
– Price Factors: While price is important, it should not be the sole consideration; evaluate products based on quality, service, and overall value.
– Brand Reputation: Opt for reputable brands to ensure better product quality and service.
– Supply Chain Risks: Evaluate supply chain risks and choose reliable suppliers to ensure supply chain security.
2. Supplier Evaluation
– Qualifications and Strengths: Assess suppliers’ qualifications, including research and development capabilities, production capacity, and service capabilities.
– Experience and Case Studies: Consider the supplier’s experience and examine case studies, taking into account feedback from other clients.
– Price and Service: Compare prices and service terms from different suppliers to select the most cost-effective solution.
3. Contracts and Agreements
– Detailed Contracts: Sign detailed contracts, clearly outlining the rights and obligations of both parties.
– Contract Terms: Pay attention to contract terms, including warranty periods and after-sales services.
– Risk Prevention: Implement risk prevention measures, such as payment ratios and breach of contract responsibilities.
IV. Global Distribution of Second-hand Network Equipment
1. Regional Markets
– North America: The United States has a large market for second-hand network equipment, primarily facilitated through auctions and trading platforms.
– Europe: Europe has a mature market for second-hand network equipment, often transacted through professional recycling companies.
– Asia: China has a rapidly growing market for second-hand network equipment, with transactions occurring through both online and offline channels.
2. Considerations for Purchasing Second-hand Equipment
– Equipment Source: Choose reliable suppliers to ensure the legitimacy of the equipment source.
– Equipment Condition: Thoroughly inspect the equipment, considering aspects such as appearance, functionality, and performance.
– Price Evaluation: Compare prices from different suppliers and choose a reasonable option.
– After-Sales Service: Ensure the supplier provides comprehensive after-sales services, including warranty and return policies.
V. Conclusion
The global network equipment supply chain is a complex system involving numerous OEMs and ODMs distributed worldwide. When procuring network equipment, it is essential to consider factors such as demand, technology, price, brand, and supply chain risks comprehensively. The optimal choice of suppliers and products depends on a careful evaluation of various criteria.
As of the first half of 2023, the top three companies in the global network switch market are Huawei, Cisco, and H3C, accounting for nearly sixty percent of the market share. In the global Ethernet card market, the top three companies are Intel, Broadcom, and Marvell, constituting almost seventy percent of the market share. The top three companies in the global Ethernet module market are Finisar, Lumentum, and II-VI, representing nearly forty percent of the market share. In the global network security hardware market, the top three companies are Palo Alto Networks, Cisco, and Check Point, holding almost fifty percent of the market share. The top three companies in the global wireless testing equipment market are Anritsu, Rohde & Schwarz, and Keysight, making up nearly sixty percent of the market share.
Considerations for the procurement of network equipment:
– Procurement of network equipment should be based on a comprehensive analysis of business needs, budget, technical expertise, security performance, reliability, compatibility, scalability, and after-sales service. Different types of network equipment have different technical parameters, performance indicators, and related requirements. Thorough market research, inquiries, and demonstrations should be conducted to avoid biased, exclusive, or unreasonable settings. At the same time, attention should be paid to negotiations and confirmations with suppliers on contract terms, payment methods, delivery deadlines, quality assurance, and maintenance guarantees to avoid disputes or losses.
– The procurement of network equipment should consider not only the price but also the cost
-effectiveness. Price is an essential factor influencing procurement decisions, but it is not the only factor. Excessively high prices may lead to wastage of funds, while excessively low prices may result in poor quality or insufficient functionality. Therefore, based on actual needs, choose the right brand and model, compare quotations and services from different suppliers, and comprehensively assess the cost-effectiveness of network equipment to select the best solution.
– The procurement of network equipment should also consider the second-hand market. The second-hand market refers to the trading market for idle, obsolete, shelved, and surplus network equipment, mainly conducted through second-hand e-commerce platforms, professional recycling companies, and individual transactions. The advantage of the second-hand market is that it allows obtaining higher performance at a lower cost, saving procurement costs, and contributing to the recycling of resources and environmental protection. The disadvantage is the existence of certain risks, such as uncertainty in product quality, authenticity, after-sales service, security, etc. Therefore, careful selection and inspection are required.
Global distribution of the second-hand market for network equipment:
– The distribution of the second-hand market for network equipment is mainly influenced by factors such as region, industry, and product type. Generally, the second-hand market for network equipment is more active in developed regions and industries, such as North America, Europe, East Asia, and in sectors like finance, telecommunications, education, and government. These regions and industries have a high demand for network equipment, frequent updates, resulting in a large amount of idle or obsolete network equipment, providing an ample supply for the second-hand market. Simultaneously, these regions and industries also have a high environmental awareness and cost-saving demand, providing a stable demand for the second-hand market.
– The distribution of the second-hand market for network equipment is also related to product types. Generally, the service life and value of network equipment are directly proportional to their complexity and functionality. In other words, the more complex and powerful the network equipment, the longer its service life and the higher its value, resulting in a higher transaction volume and price in the second-hand market. For example, core equipment such as network switches and routers, with high technical content, stable performance, and long update cycles, have a relatively high transaction volume and price in the second-hand market. Auxiliary equipment such as Ethernet cards and Ethernet modules, with low technical content, average performance, and short update cycles, have a relatively low transaction volume and price in the second-hand market.
In conclusion, the procurement of network equipment involves careful considerations of various factors, including needs analysis, supplier evaluation, contract agreements, and a balanced approach to price and quality. Additionally, exploring the second-hand market requires attention to equipment sources, conditions, prices, and after-sales services. The global distribution of the network equipment supply chain and the second-hand market offers diverse opportunities for businesses aiming to optimize their infrastructure while managing costs effectively.
