Word: cisco
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...facility in Zalaegerszeg, Hungary--is that they are not owned by Microsoft. The Xbox is being made by Flextronics, a company that few consumers have heard of but that computer and telecommunications-equipment makers are eager to do business with. Indeed, near Building 12 are 16 production lines for Cisco Systems digital network routers. Other buildings produce Palm Pilots and DirecTV set-top boxes...
Fewer and fewer famous brands make what they sell. Apple no longer assembles the bulk of the iMacs it sells. Hewlett-Packard, the world's leading brand of personal printers, doesn't make a single one. Nor does Cisco make the complex digital switches and routers that make up the backbone of the Internet. Instead, each of these companies (and the list grows daily) is throwing its financial and intellectual capital into product research, design and innovation--conceiving the next generation of gadgets and services, and marketing them under trusted brands...
Flextronics' most sophisticated operations, which manufacture routers for Cisco and wireless base stations for Ericsson, are based in places like Silicon Valley and Sweden, where top talent is available. Its most labor-intensive operations are still in China, where Flextronics mostly makes comparatively simple electronic products, from PC parts for Dell and mouse assemblies for Microsoft to cell phones for Nokia, Motorola and Ericsson...
...they could compete against larger rivals Solectron and Flextronics. SCI, with $9.1 billion in sales last year, mainly assembles PCs and telecom gear, using relatively low-paid labor in countries like Mexico and Malaysia. Sanmina manufactures more complex switches, routers and optical-networking equipment for the likes of Cisco, Alcatel and Motorola, often using skilled labor or factories equipped with robots and lasers. If the merger is approved, as expected, by shareholders and regulators in the U.S. and Europe, the combined company will employ 50,000 workers at 100 plants in 21 countries...
...missed the boat when networking and telecom companies like Cisco became the largest customers for the EMS industry. Leading competitors like Flextronics and Sanmina, says Merrill Lynch analyst Jerry Labowitz, grew at a faster pace, pursuing diverse acquisitions while SCI was busy trying to add optics and networking companies--now suffering heavily from overcapacity--to its PC and cell-phone business...