The pressures are particularly evident in the telecom sector. Under its deal with Flextronics, Ericsson will sell facilities in Brazil, Malaysia, Sweden, and the United Kingdom. Besides Flextronics, the company has also tapped two Taiwanese contract manufacturers, Arima and GVC, to make low-end cell phones. The Ericsson-Flextronics model is something that more OEMs will migrate toward, and Nokia could be next, First Union's Cage said. It happened to the PC industry in the early 1990s.
Some executives indicate that history has proven otherwise.
Mass. OEMs have relinquished printed-board layout and PCB design. If we could influence the product design, we could further streamline the introduction cycle as well as the product costs. To win over hesitant OEMs, Boucher said EMS companies have to demonstrate their ability to undertake multitask manufacturing and design procedures. That same cycle will play itself out, in my mind, for design. To date, major contract manufacturers such as Celestica, Flextronics, MSL, and Solectron have spent fortunes to enhance their front-end supply offerings by acquiring design companies.