China Networking Products Industry

An Expert's View about Sourcing in China

Posted on: 26 Mar 2010

China’s networking equipment industry remains in an upturn, purred by widening adoption in the home and enterprise segments world wide. The former is buoyed by declining implementation costs and the broadening range of multimedia entertainment devices and applications that support an interconnected infrastructure. The globalization of business and resulting need for efficient data sharing and storage, electronic commerce and even services such as video conferencing to increase productivity are feeding the second sector.


Although export sales declined recently as users, in particular businesses, curtailed spending on equipment to stream line overhead,China suppliers are confident of sustained momentum. The majority  forecasts an increase in overseas trade in the next 12 months, with nearly 60 percent expecting a more than 20 percent adjustment.


In preparation for the projected upswing, makers are developing models with enhanced performance and transmission. Most of them will continue targeting the entry-level and midrange sectors to steer clear of the high end, which is dominated by international companies. Many are,however, stepping up R&D to move upmarket and widen reach. They are adopting wireless technologies and incorporating specialized applications to cater to niche segments such as schools and the military.


The following are some of the key trends in China’s networking equipment industry:

• Prices will remain in a downward trend as makers boost competitiveness.

• Product development is geared toward enhancing the data rate and integrating value-added features to support more applications.

• Wireless, Gigabit Ethernet and IP technologies will be increasingly adopted. Suppliers of routers, access points, and LAN cards and adapters are releasing more cable-free versions to broaden selections and reach a wider client base. Falling chip cost and the rising popularity of 802.11n will accelerate WLAN’s penetration.

• Gigabit Ethernet will drive R&D in the switches segment even as Ethernet-based units continue to account for the bulk of output. Manufacturers of KVM switches will be emphasizing IP-enabled units.

• Feature integration is another key trend. More combination router, access point and gateway variants will be launched in coming months.

• Companies are exploring new destinations in non-EU countries, the Middle East and the Asia-Pacificregion even as they broaden reach in the US and the EU.

• To strengthen export capability, makers are shortening design and development time, and improving operating efficiency. They will be increasing capital expenditure to support expansion plans.




The above is extracted from the Executive Summary of China Sourcing Report: Networking Products


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Posted: 26 March 2010

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