The results proved that demand is strong across the board. The most explosive growth in demand is for wireless phones and infrastructure, optical network systems and components, and access equipment. That's the good news. The bad news is the majority of companies are having trouble getting the components for communications equipment. Normally, shortages are short-term in nature.
Component suppliers are usually able to add capacity very quickly.
However, capital spending on communications equipment has been running at a very high rate for more than a year now and there's no let-up in sight. All of this leads to very high demand for equipment. The demand is so strong that vendors located throughout the supply chain are struggling to fulfill orders in a timely fashion. Margins threatened As I mentioned before, these shortages have not really impacted sales. The real impact was often felt in the gross margin line, as companies paid more for components than they had in the past.