The evolution of the wireless equipment value chain

Abstract

Mobile wireless telephone systems require enormous investments in land-based radio, transmission, and switching systems in order to provide the coverage and capacity to efficiently operate a regional or nationwide cellular phone network. This wireless equipment is manufactured by an oligopoly of Original Equipment Manufacturers (OEM). These "wireless OEMs," in turn, depend upon a growing number of "upstream" component and subsystem suppliers and "downstream" wireless operators. Together these firms compose the "Wireless Equipment Value Chain." As in many industries where technology is changing rapidly, wireless telephony has seen waves of change in industry structure. This thesis surveys the forces currently driving change in the industry, outlines scenarios that describe potential directions for reorganization of the industry structure, and lists a set of warning signs that may provide clues to future trends within the industry. In addition, the thesis provides a model for the structure of the industry, which is used to construct the scenarios. Finally, it compares the strategies of two large OEMs using the models and scenarios.