Thursday, September 18, 2014

Ericsson Exits LTE Modem Business

Ericsson announced its decision to discontinue further development of LTE modems and shift these resources to radio network R&D, including small cells.  Since taking over the modem business of the discontinued ST-Ericsson venture last year, Ericsson said market dynamics have shifted and price erosion has occurred. As a result, it no longer makes sense to continue in this space.

Ericsson's modem business has 1,582 employees distributed across the following main sites: Sweden (689), India (235), Germany (216), China (206), Finland (122).

Hans Vestberg, President and CEO of Ericsson said: "We have concluded the first phase of the modems strategy by successfully delivering the Ericsson M7450 modem. However, given the modem market dynamics and the development in small cells and indoor coverage markets, we believe resource re-allocation is more beneficial for the Ericsson Group and our customers overall."

However, the company will deliver commercially available Ericsson M7450 modem as planned.

In August 2013, Ericsson and STMicroelectronics completed the previously announced break-up of their joint venture, ST-Ericsson.

Effective August 2, 2013 Ericsson took over the design, development and sales of the LTE multimode thin modem solutions, including 2G, 3G and 4G interoperability. In total, approximately 1,800 employees and contractors joined Ericsson at the time.

ST has taken on the existing ST-Ericsson products, other than LTE multimode thin modems, and the GNSS (Global Navigation Satellite System) connectivity solution sold to a third party, and related business as well as certain assembly and test facilities. In total, approximately 1,000 employees have joined STMicroelectronics.