2.1 industry chain value chain business model

2.1.1 communication equipment industry chain

The upstream of communication equipment is generally the supply of raw materials and components for chips and other equipment. This area has always been a high-tech integrated industry with high technology content and strong global monopoly; The downstream is generally the communication operators and some special industry users, such as the military, the government, etc. relatively speaking, the downstream market competition is more abundant, but it is still a monopoly industry.

As far as the whole communication industry chain is concerned, the participants in the market are very limited. Due to its wide range of service objects, the viability of small and medium-sized enterprises in the industry chain itself is limited. Throughout the world, almost all the enterprises in the industry chain play a very large role. It can be said that there are almost no small enterprises in the industry chain, Except for some specific pure technology solution providers.

Figure communication equipment industry chain

1) The relationship between communication equipment industry and upstream and downstream industries

The upstream industries of the industry are mainly chip, PCB, optical devices and other products and solutions supply industries, in which chip is the core component; The downstream industry of the industry represents the demand of the main application market, and the main customers of the industry are communication equipment providers, telecom operators and enterprise users.

Enterprises in this industry generally purchase directly from upstream enterprises, and the business models adopted by downstream enterprises are mainly ODM, EMS and JDM. Due to the characteristics of communication network interconnection, industry products and chips, other system equipment in broadband access network need software and hardware compatibility, protocol consistency and data interoperability. Therefore, enterprises in the upstream and downstream industries of the industry chain generally need to form a long-term stable cooperative relationship to achieve a high degree of consistency between products and systems. There is a strong correlation between the industry and the upstream and downstream industries.

2) The influence of the development of upstream and downstream industries on the industry

I. Development Status of upstream industry and its impact on the industry

The upstream enterprises are mainly manufacturers of electronic components. At present, in addition to the main chips mainly imported from abroad, other raw materials have basically been purchased at home, with sufficient supply and full competition. The main manufacturers of core component chips include Qualcomm, Broadcom limited, Intel Corporation, Marvell Technology Group and Taiwan enterprises. The competition in the upstream chip industry and the accelerating trend of chip localization are conducive to the manufacturers and other chip purchasers in the industry to reduce production costs. At present, chips with the same function generally have a variety of differentiated chip solutions for enterprises to choose. Differentiated chip products provide convenience for enterprises in the industry. At the same time, enterprises with strong software R & D ability in the industry can obtain higher added value.

II. The development of downstream industry and its impact on the industry

With the continuous expansion of the scale of the final consumer market, the purchasing scale of downstream industries from the industry has increased year by year, which makes the market scale of the industry continue to expand and cultivates some enterprises with certain R & D strength.

At the same time, the communication equipment providers in the downstream industry are more focused on brand building, market channel construction, industry standard formulation and software and application development, and the cooperation mode with manufacturers in the industry is gradually changing to ODM and JDM mode, which puts forward higher requirements for the R & D ability of ICT terminal manufacturers in families, enterprises and industrial applications, But terminal manufacturers can also win the market by accurately judging the market demand and designing reasonable solutions, so as to provide higher value-added services.

In addition, with the increasingly fierce market competition of telecom operators, communication equipment providers in the downstream industry pay more attention to the profit situation. The supply chain management system based on the industrial chain emerges as the times require. The communication equipment providers in the downstream industry can effectively control the cost by directly participating in the whole process of R & D and manufacturing of ICT terminal manufacturers for families, enterprises and industrial applications, The interaction with downstream enterprises is deepened, which further promotes the manufacturers in the industry to continuously improve their operation and production management level.