Tag: Ericsson

Ericsson sulks over results

ericsson-logoEricsson President and CEO Börje Ekholm had a Nordic sulk over his companies results and said he was not satisfied with the outfit’s underlying performance.

Ericsson saw continued declining sales and increasing losses in the quarter and while its brand new business strategy was gaining traction, there will need to be some costs cut.

“We will accelerate our actions to ensure that we can meet our target of doubling the 2016 operating margin beyond 2018. Actions will be taken primarily in service delivery and common costs and do not include R&D,” he said.

Sales adjusted for comparable units and currency declined by 13 percent. Based on the development in the first half of the year, Nokia’s current view of the Radio Access Network (RAN) equipment market outlook is in line with external estimates of a high single-digit percentage decline for the full year 2017.

“Considering the current market environment, the company position, and the more focused business strategy, we continue to assess risk exposure in ongoing contracts. Depending on the outcome, we see an increased risk of further market and customer project adjustments, which would have a negative impact on results, estimated to SEK 3-5  billion. for the coming 12 months, of which 30 percent is estimated to impact cash,” Ekholm said.

The decline in the Networks result in the quarter was mainly caused by lower software sales, driven by two key factors; unusually strong software sales in the second quarter last year and cautious mobile broadband investment levels. On the positive side, Ericsson did well in radio.

He said that Ericsson will improve its Networks will be generated through both the continued ramp-up of Ericsson Radio System (ERS) and cost reductions, mainly in service delivery. The ERS continues to prove its competitiveness and now represents 49 per cent  of radio unit deliveries in the quarter. During the quarter, we announced a break-through contract to support Vodafone UK to evolve its 4G network and to provide 5G radio technology. To safeguard a future leading portfolio, we have started to increase R&D investments in Networks.

“In line with our more focused strategy, we signed an agreement in the quarter to divest the power modules business.”

IT & Cloud had another challenging quarter with significant losses. The sequential increase in losses is largely explained by lower capitalization of R&D expenses. Gross margin continued to be negatively impacted by large digital transformation projects, he said.

Sales decreased by eight percent. The RAN equipment market for 2017 is estimated to show a high single-digit percentage decline compared with previous estimate of two to six percent.

Gross margin, excluding restructuring charges, was 29.8 percent. Operating income was $140 million.

 

Nokia quickly merges Alcatel-Lucent operations

wellington-bootFormer rubber boot maker Nokia has gained control of French counterpart Alcatel-Lucent following its $17 billion all-share offer and the two telecom equipment makers are planning to swiftly merge their operations.

Nokia wants to be in a stronger position to give Ericsson and Huawei a good kicking in the telecom network gear markets.  To do that it has to absorb  Alcatel-Lucent and restructure its channel rather fast.

Formal closure of the deal is not expected unti the first quarter of next year, but the restructuring will happen before that.

Nokia Chief Executive Rajeev Suri said that from January 14, 2016, Nokia and Alcatel-Lucent will offer a combined end-to-end portfolio of the scope and scale to meet the needs of our global customers.

The stock is still down about 10 percent since the announcement of the deal in April as investors have worried about the integration process and special terms negotiated by the French government.

But in October, Nokia brought forward the deal’s 900 million euro cost-saving target by a year to 2018.

The deal, set to become the biggest transaction in Finland’s corporate history, follows a string of M&A moves that have restructured former mobile phone giant Nokia in recent years.

In 2013, it took control of its network business by buying out Siemens from a joint venture, and in 2014 it sold the ailing mobile phone business to Microsoft. Last year it also sold navigation business.

Ericsson and Cisco create global tech partnership

webhomes-our-work-ciscoEricsson and Cisco have announced a global business and technology partnership which will offer routing, data centre, networking, cloud, mobility, management and control, and global services capabilities.

It is a pretty powerful combination. They already are partners, with a combined 56,000+ patents, $11 billion of research and development investment, and more than 76,000 services professionals serving customers across more than 180 countries.

Apparently this new announcement will be supported by multiple agreements that include commitments to network transformation through reference architectures and joint development, systems-based management and control, a broad reseller agreement, and collaboration in key emerging market segments.

The parties have also agreed to discuss FRAND policies and enter a licensing agreement for their respective patent portfolios, enabling unfettered joint innovation and providing certainty for customers of both organisations. Under the deal Ericsson will receive license fees from Cisco.

Teams from both organizations will also begin working on a joint initiative focused on SDN/NFV and network management and control.

Hans Vestberg, President and Chief Executive Officer, Ericsson said in a statement that the partnership will focus on service providers, then on opportunities for the enterprise segment and accelerating the scale and adoption of IoT services across industries.

“For Ericsson, this partnership also fortifies the IP strategy we have developed over the past several years, and it is a key move forward in our own transformation,” he said

EC approves Nokia’s Alcatel-Lucent buy

euThe European Commission has approved Finnish telecom equipment group Nokia’s planned buy of Alcatel-Lucent because the two were not close competitors.

It said the merged Fin-French outfit will still face shedloads of competition even if it will have combined market shares around or above 30 percent for several specific types of equipment.

“The overlaps between the two companies’ activities are effectively limited,” the Commission said in a statement.

Nokia had a strong presence in Europe, where Alcatel-Lucent was small, with the positions reversed in North America.

Nokia launched its all-share deal then worth 15.6 billion euros to buys its smaller French rival in April. The move is seen as the company building up its telecom equipment business to compete with market leader Ericsson.

The merged group is smaller than the son of Eric, but bigger than Chinese rival Huawei’s and ZTE.

 

Ericsson sues Apple

EricssonSwedish company Ericsson has taken Apple to court and also complained to the US International Trade Commission (ITC), it said today.

Ericsson claims that Apple refused its offer to have a court decide fair licensing terms that would be binding on both companies. And because of that, it has filed a complaint with the ITC seeking to exclude its products for infringing patents directly linked to 2G and 4G LTE standards.

It filed a second complaint with a Eastern district Court in Texas asking for damages and injunctions for “infringement of patents that are critical to many other aspects of Apple’s devices”.

This second instance related to 41 patents which Ericsson claims covers not only 2G and 4G/LTE standards, but other patents related to semiconductors, user interface software, location services and application and the iOS operating system.

Ericsson claims that by refusing its reasonable licensing offer used in both Apple smartphones and tablets, “Apple harms the entire market”.

Apple’s global licence agreement for Ericsson mobile technology apparently expired last month.

Apple takes on Ericsson in phone row

handsetFruity cargo cult Apple has sued the Swedish phone outfit Ericsson in an attempt to break the patent deadlock between the pair.

Apple said that Ericsson’s LTE wireless technology patents are not essential to industry mobile standards and that it is demanding excessive royalties for them.

Jobs’ Mob insists that it has not infringed on the patents and does not owe Ericsson a cent for them.

Ericcson wants cash for the LTE technology calculated as a percentage of the price of the entire smartphone or tablet. However, Apple said that the royalties should be based on the value of the processor chip that includes the technology.

If Ericsson’s patents are deemed essential and the court rules Apple has infringed on them, Apple said it wants the court to assign a reasonable royalty rate.

Apple spokeswoman Kristin Huguet said that Apple was always willing to pay a fair price to secure the rights to standards essential patents covering technology in its products. However Apple can’t agree with Ericsson on a fair rate for their patents so, as a last resort, we are asking the courts for help.

Apple and Ericsson currently have a license agreement that covers many of Ericsson’s allegedly standard-essential patents. The agreement was signed in 2008 soon after Apple launched the iPhone, according to the court filing.

5G planning starts

oldfoneWhile most people haven’t even moved to 4G phone networks yet, manufacturers are already talking about standards for the next faster generation of 5G phones.

Major vendors are engaging with the formal standards process, according to ABI Research.  Those include Alcatel-Lucent, Ericsson, Huawei, Intel, Qualcomm, Samsung, mobile operators and academic bodies.

Research director Philip Solis sad: “These companies are all waving their 5G flags, although 5G definitions and visions remain very vague.  But this is not merely marketing. These companies are most certainly putting a stake in the ground that will leverage their, work, competitive strengths, and, most crucially, patents.”

He said that Qualcomm in particular is keeping its head low, but other vendors such as Apple and Google are getting actively involved.

Solis said that efforts by vendors to use their patents will be fiercer than for 4G.

But despite the competitive edge, Solis said that companies are working together “so the standardisation process can hit the ground running”.

Smartphone subscriptions to hit 5.9bn by 2019

smartphones-generic

The findings of the latest Ericsson Mobility Report indicate that the smartphone craze has not peaked just yet. The report found that the number of mobile subscriptions will reach 9.3 billion by 2019 and more than 60 percent of all subscriptions will be for smartphones.

An estimated 90 percent of the world’s population will be covered by current generation WCDMA/HSPA networks, while 65 percent of the population will have LTE coverage. Smartphone data traffic is expected to increase tenfold over the next six years.

“The rapid pace of smartphone uptake has been phenomenal and is set to continue. It took more than five years to reach the first billion smartphone subscriptions, but it will take less than two to hit the 2 billion mark,” said Douglas Gilstrap, Senior Vice President and Head of Strategy at Ericsson.

“Between now and 2019, smartphone subscriptions will triple. Interestingly, this trend will be driven by uptake in China and other emerging markets as lower-priced smartphone models become available.”

At the moment, smartphones account for about 25 to 30 percent of all mobile phone subscriptions, but they are already outpacing feature phones in terms of new sales.

Mobile data traffic to increase 1,000 times beyond 2020

ericsson-logoConsumers and carriers are slowly but surely transitioning to 4G and the hunger for high speed broadband on the go is  transforming the way we use our clever mobile devices, including traditional kit like notebooks. Earlier this week Samsung announced its first 5G milestone, proudly telling the world that 1Gbps 5G is coming by 2020.

Alcatel – Lucent CEO steps down following $1.85bn loss

alcatel-lucentThe chief executive of struggling telecom equipment maker Alcatel – Lucent is leaving the company. Ben Verwaayen took the helm four years ago and tried to return the outfit to profit. He failed.

Alcatel – Lucent posted a $1.85 billion loss for 2012, compared to a $1.49 billion gain in 2011, so Verwaayen’s departure should come as no surprise.  Verwaayen announced his decision to step down in a statement Thursday, saying that now is the appropriate moment for Alcatel – Lucent to seek new leadership.

“Alcatel-Lucent has been an enormous part of my life. It was therefore a difficult decision to not seek a further term, but it was clear to me that now is an appropriate moment for the Board to seek fresh leadership to take the company forward,” said Verwaayen.

Philippe Camus, Chairman of the Alcatel-Lucent Board, said: “After due reflection, the Board has accepted Ben’s decision to step down as CEO.” Camus went on to thank Verwaayen for his efforts to stabilise the company over the past four years.

It remains unclear who will replace Verwaayen and he is likely to stay on until a successor is found. The company said it would consider in-house candidates as well as candidates from outside the company.

Although Verwaayen did not manage to turn things around, he can hardly be blamed for Alcatel – Lucent’s woes. The company was created following a $11.6 merger of Lucent Technologies and Alcatel in 2006. It has been downhill ever since. Verwaayen, the former head of the  BT Group, joined the company in 2008, after the previous American-led management was ousted.

Alcatel – Lucent has been trying to restructure and reposition itself in the telecom infrastructure market, but so far it did not have much luck competing against the likes of Ericsson and Huawei.