ADC Telecommunications, Inc. provides communications network infrastructure solutions and services worldwide. Its products and services provide connections for communications networks over copper, fiber, coaxial, and wireless media, as well as enable the use of Internet, data, video, and voice services by residences, businesses, and mobile communications subscribers. The company's products include fiber optic, copper, and coaxial -based frames; cabinets; cables; connectors; cards; and other physical components that enable the delivery of communications for wireline, wireless, cable, and broadcast networks by service providers and enterprises. ADC Telecommunications products also include network access devices, such as high-bit-rate digital subscriber line and wireless coverage solutions. In addition, it provides professional services relating to the design, equipping, and building of networks. The company?s customers include local and long-distance telephone companies, private enterprises that operate their own networks, cable television operators, wireless service providers, new competitive service providers, broadcasters, governments, system integrators, and communications equipment manufacturers and distributors. ADC Telecommunications sells its products through sales personnel, value-added resellers, distributors, manufacturers' representatives, independent sales representatives, and third-party distributors, as well as through other public and private network providers. The company was founded in 1935. It was formerly known as Magnetic Controls Company and changed its name to ADC Telecommunications, Inc. in 1985. ADC Telecommunications is headquartered in Eden Prairie, Minnesota.

Technology Industry Analysis

WikiWealth.com Industry Description: Information technology (IT) or information and communication technology (ICT) is a broad subject which deals with technology and other aspects of managing and processing information, especially in large organizations. Particularly, IT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit, and retrieve information. Over the past 20 years, its prevalence has dramatically increased so that it is now a part of nearly every aspect of daily life. Technology generally includes: computer science, electronics, software, and internet. Read More. Also see the Industry Analysis Home Page.

WikiWealth.com Industry Analysis: During economic recessions, consumers and businesses tend to cut back on technology expenses to save money during tough economic times. Less spending decreases business revenue and eventually decreases stock prices. During economic recoveries, consumers have more income and business investment needs, so spending quickly increases. Higher spending increases business revenue and eventually increases stock prices. During a longer economic expansion, discretionary income and business demand increases, but at a slower pace than during the recovery stage.

¹ Investment potential (margin of safety) is a weighted average of the discounted cash flow analysis (DCF), the enterprise value (EV) market multiple analysis, and the Warren Buffett investment analysis. WikiWealth obtains 80% of their quantitative investment potential from fundamental investment analysis.
² The weighted average cost of capital (WACC) analysis for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC analysis offers both stability and accuracy for each individual company.

WikiWealth.com Profit Analysis: The best way to profit from technology stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street Analysis on left side), and have high Main Street Common Sense investment ratings (see Main Street Analysis on right side). When an economic recovery occurs, technology stocks tend to outperform the general stock market, because consumers and businesses quickly resume spending on items they wanted, but resisted buying during tougher economic times. Eventually those investments become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to sell technology stocks, because they are likely to decrease in price quickly. Technology makes the lives of consumers and businesses easier, but during tough economic times, people tend to work harder, which offsets the benefits of technology temporarily. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. For more information on stock research ratings click here.

Investment Moats

Investment Moats are fundamental investing theories developed by Warren Buffett and adapted to the SWOT analysis. Investment moats are general characteristics that separate great investments from average stock investments. The wider the investment moat the better. Read more: Investment Moats. For company-specific investment moats: SWOT Analysis.

SWOT Strengths Increase Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

SWOT Weaknesses Decrease Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Stock Price Triggers

Triggers were developed by WikiWealth.com to predict changes in stock price direction, which depend on events outside of the control of the company. In general, if SWOT opportunities are greater than SWOT threats, the stock price should raise; the opposite is also true. For more precise measures, examine each SWOT opportunity and threat, then rank them according to importance and timing. The more important the investment characteristic, the greater the impact on stock direction. The sooner a investment trigger may occur, the more influence it will have on stock price direction. Read more: Stock Price Triggers. For company-specific stock price triggers: SWOT Analysis.

SWOT Opportunities are Positive Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

SWOT Threats are Negative Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Long Company Description (help)

We help the world communicate, supplying network equipment, software solutions, and integration services for broadband, multiservice networks that deliver data, video, and voice communications over telephone, cable television, Internet, broadcast, wireless, and enterprise networks. Our mission is to enable communications service providers worldwide to serve their residential and business customers more efficiently. We achieve this with talented and dedicated employees who are complemented with a diverse resource of suppliers.

Overview

In the unrelenting drive for bandwidth, communications service providers across the globe increasingly rely on ADC to eliminate the bottlenecks in the delivery of high-speed, high-quality video, data and voice services to consumers and businesses — in the home, in the office and on the go. With an industry-leading portfolio of network infrastructure solutions and services, ADC is supporting our customers as they continue to invest heavily in the migration to next generation networks. This transformation impacts the “last mile/kilometer”— the network area where ADC helps smooth the convergence of wireline and wireless applications and transitions infrastructure from its legacy copper and circuit origins to a fiber and packet architecture.

Since ADC was founded in 1935, it has become a world leader in providing global network infrastructure products and services that enable the profitable delivery of high-speed Internet, video, data, and voice services to residential, business and mobile subscribers worldwide. With the acquisition of the KRONE Group in 2004, ADC now offers global copper- and fiber-based connectivity solutions and cabling products used in public access and enterprise networks and provides global scale and expanded products and services to better serve customers anywhere in the world.

Financial Overview
ADC annual sales: $1.32 billion (FY 2007) - Outside of the United States = 39%.
ADC stock is traded on The NASDAQ Stock Market under the symbol ADCT.

Number of Employees
ADC employs approximately 9,000 professionals worldwide.

Locations
Headquartered in Minneapolis, Minn. in the United States, the company has sales into more than 130 countries and occupies facilities around the world including locations in Australia, Austria, Belgium, Brazil, Canada, Chile, China, Czech Republic, France, Germany, Hong Kong, Hungary, India, Indonesia, Italy, Japan, Malaysia, Mexico, New Zealand, Philippines, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Thailand, the United Arab Emirates, the United Kingdom, the United States, Venezuela, and Vietnam.

Businesses
Our customers are served regionally around the world by businesses focused on solutions designed for telecommunications, wireless, cable, and enterprise networks. The business units within ADC developing products and services include Global Connectivity Solutions, Network Solutions and Professional Services. These organizations service all types of networks through a combination of equipment, solutions and services.

Products and Services

Connectivity - ADC is a leading global fiber infrastructure supplier with solutions that accelerate the deployment of fiber-intensive broadband networks serving business, residential and mobile subscribers.

Service providers worldwide are looking to ADC connectivity products to simplify network installation, maintenance and management from the central office/headend, through the outside plant, all the way to the premises. Our fiber and copper connectivity portfolio, including OmniReach® FTTX Solutions for the outside plant, offers scalable cost-efficient solutions for any type of architecture, providing enhanced services to subscribers and new sources of revenue for service providers. In addition, our acquisition of Century Man Communication in China strengthens our position in this fast-growing connectivity market and enables us to meet the unique needs of developing countries.

From global financial institutions to universities to government agencies, new technologies and advanced business requirements that consume more bandwidth require rethinking the entire enterprise network infrastructure. Engineered to maximize uptime, ADC’s TrueNet® portfolio provides copper and fiber cable, connectivity and cable management solutions for the world’s most sophisticated data centers and local area networks. ADC products are designed to use less space, protect fiber-optic cables and promote energy efficiency, while supporting the high-speed delivery of mission-critical services.

ADC continues to innovate. Connectivity products, such as our reduced-bend radius fiber cables, high-density frames and multiple dwelling unit (MDU) solutions, lead the industry in supporting the delivery of high-bandwidth services. We are also a leading supplier for reliable, high-performance high-definition video and multichannel audio connectivity products used by broadcasters and service providers worldwide.

Wireless - With today’s converged wireless applications outstripping wireless networks’ capabilities, ADC is delivering the next-generation Radio Access Network (RAN) to improve both coverage and capacity in high-demand and hard-to-reach locations. We are helping change the way people communicate through our high performance and scalable FlexWave™ solutions for wireless networking. From extending fiber reach, to increasing indoor and outdoor coverage and capacity, to providing high-speed wireless backhaul, carriers consistently look to ADC for reliable solutions that increase revenue, lower churn and improve customer satisfaction.

ADC is well-positioned to meet the diverse customer and geographic needs of the constantly evolving wireless marketplace. Our recent acquisition of LGC Wireless and its innovative in-building solutions expands our wireless product portfolio and accelerates the execution of ADC’s All-IP RAN, creating a comprehensive portfolio of market-leading solutions for carriers and the enterprise.

Wireline - ADC’s wireline products enable delivery of high-capacity voice and data services over copper or optical facilities in the “last mile/kilometer” of communications networks, while integrating capabilities that can help reduce capital and operating costs. The LoopStar® and PONy Express™ product families provide flexible and economical optical transport platforms for both legacy voice and next-generation protocols. When building a new network or managing or expanding an existing one, our solutions support the delivery of a wide array of business service and cell site backhaul offerings for carriers and the enterprise, for a variety of different transmission rates and protocols.

Professional Services - With deep experience in multivendor, multitechnology and multiservice networks, ADC supports customers throughout the technology lifecycle. We help create and maintain wireline, wireless, cable and enterprise networks in North America and Europe — from network design, build-out, turn-up and testing to ongoing maintenance and training. Customers rely on ADC to plan, deploy and maintain networks delivering commercial and residential broadband services. ADC is also expanding support of wireless carriers and cable operators while continuing to serve as a cost-effective resource for our customers.

History

In 1935 – the height of the great depression – a young engineer by the name of Ralph Allison founded ADC in the basement of his south Minneapolis home, inventing ADC's very first product, the audiometer, an electronic device designed to test hearing.

Two years later, fellow engineer Walt Lehnert joined Allison, and together they diversified the company's product line to include amplifiers and transformers for the broadcast industry. By 1942, the company had designed a sophisticated audio system for the University of Minnesota, and the resulting jacks, plugs, patch cords and jackfields became the cornerstones for ADC's later entry into telecommunications.

In 1949, ADC sold its audiometer product line and Ralph Allison left ADC to form a new company in California. ADC diversified and focused its efforts in the area of transformers and filters for power lines, military electronics, telephone jacks and plugs. And in 1961, ADC merged with Magnetic Controls Company, a manufacturer of power supplies and magnetic amplifiers with strong ties to the U.S. space program.

The resulting company, ADC Magnetic Controls, had a decade of mixed success. Although transformer sales boomed during the 1960s, other new product initiatives failed to materialize. Perhaps the most significant product innovation during this period was the bantam jack, a miniaturized component that eventually became the standard for telephone circuit access and patching.

Building on its growing sales of jacks and plugs in the early 1970s, ADC introduced prewired, connectorized jackfields, wired assemblies and test equipment for telephone operating companies. By 1974 the company was on solid ground, and by 1976, ADC had become the largest independent supplier of test boards in the United States.

ADC's growing presence as a supplier to the telecommunications industry was significantly enhanced in 1983, when AT&T was ordered to deregulate by the federal government. By establishing the seven regional Bell operating companies (RBOCs) as independent entities, the U.S. market for telecommunications expanded by 90 percent. No longer forced to purchase their equipment from the Western Electric Division of AT&T, the RBOCs began to look for suppliers like ADC that had a reputation for quality and innovation in the marketplace. Over time, the RBOCs would become ADC's key customer base.

magnetics business in 1984 and formally changed its name to ADC Telecommunications, capitalizing on the shift in technology from analog to digital, and becoming the industry leader in digital signal cross-connect devices.

In March 2004, ADC purchased the KRONE Group, a leading global supplier of copper- and fiber-based connectivity solutions and cabling products used in public access and enterprise networks. With the addition of KRONE employees, products and services, ADC now provides global scale and a broadened scope of products and services designed to serve public network and enterprise customers anywhere in the world.

Today, ADC has grown to become a leading global supplier of equipment and software for telecommunications, cable television, broadcast, wireless, and enterprise networks. ADC products perform critical functions that ensure the quality and reliability of broadband networks throughout the world.

SWOT Analysis

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