Ericsson To Run ST-E’s Thin Modem Unit As A Separate Businees
Ericsson will run the thin modem business it is absorbing from ST-Ericsson as a separate business with its own P&L.
At an analyst conferecne call today Ericsson’s CFO Jan Frykhammar said that he expects the unit to make a loss of 500m Swedish Krona ($77.5m) in Q4, “primarily driven by R&D”, and would have no revenue until the 7450 modem ramps up in the first half of 2014.
Frykhammar added that the thin modem unit “will have sufficient resources to deal with the product road-map and sales ambitions.”
Frykhammar said that in an 18 months to 24 months timeframe he expected Ericsson to be a top three player in the thin modem market.
Asked what market share that would require, Ericsson declined to answer.
Frykhammar said it would be good for the industry as a whole if development of the 7450 was continued, a view supported by Mike Bryant, who told EW: “One possibility would be for Motorola/HTC/Nokia/Sony and maybe others clubbing together (with Google money ?) to ensure they aren’t left to the whims of Qualcomm.”
Asked who would head up the thin modem business unit, Frykhammar said the business has “very competent existing managers” who will continue with the business.
When it was put to Ericsson that others would be integrating the modem, Ericsson said it believed there would be a market for modems.
A mention about how Ericsson was “excited” by the prospects for its thin modems, brought the sardonic response from one analyst on the conference call: “We’ve heard about the excitement about these products before.”Tags: businees, business unit, prospects, qualcomm, whims