OEMs routinely buy switches by the million. Yet many buyers are switching vendors, too. According to Venture Development Corp., Natick, Mass., 40% of OEMs surveyed changed switch vendors during the previous year. The most common reasons for the change were price increases and long lead times.
VDC says that many switch types are now available at rock-bottom prices from many different sources. So, OEMs needn't put up with a troublesome switch vendor for very long. OEMs most often substituted between 25% and 50% of their switch purchases when they signed with a new vendor. These swaps were permanent when problems simply weren't resolved, or temporary when alternative sourcing was required.
"This turnover is indicative of a more competitive market in which low-cost switch manufacturers from around the world are offering products with increasingly higher quality," says VDC analyst Jacob Millette. "This affects the market share of those suppliers unable to simultaneously cut costs and manufacture a quality switch."
For more information, see Volume V of VDC's 2002 Global Switch Market Intelligence Service: "Analysis of Buyers and Sellers." Go to www.vdc-corp.com for details.
