Ericsson Mobile Communications

Ericsson Mobile Communications was the Ericsson group company responsible primarily for the development and manufacture of mobile telephones. Its roots lay in the mobile-phone activities of Ericsson Radio Systems and General Electric, which were combined on 1 July 1989 in a joint venture called Ericsson GE Mobile Communications. Ericsson initially held 60 percent and General Electric 40 percent. The venture combined Swedish handset and research operations with General Electric's mobile-phone manufacturing presence in the United States, including a large factory in Lynchburg, Virginia. The business was created at a time when mobile telephony was still a relatively small part of Ericsson's radio-systems activities, but its importance expanded quickly. A research-and-development office opened in Research Triangle Park, near Raleigh, North Carolina, in 1990. The arrangement was intended to separate research and development from manufacturing while retaining important facilities in Lund and Kumla in Sweden. Cooperation between Ericsson and GE was difficult, however, and the venture struggled to establish a strong position in the United States handset market. Ericsson bought an additional 20 percent in early 1992, and GE withdrew from the board in 1993. In April 1998, GE exercised a contractual sell-back provision and transferred its remaining interest to Ericsson, making Ericsson the sole owner. By the mid-1990s, mobile telephony had become central to Ericsson's radio-systems business. On 1 March 1994, Johan Siberg became chief executive and the company adopted the Ericsson Mobile Communications name, also associated with the abbreviation ECS. The business expanded handset volumes rapidly and developed product families for NMT, ETACS and GSM networks. Its portfolio included conventional handheld and flip phones, business-oriented devices, early smartphones and experimental connected-computing products. Ericsson also helped develop Bluetooth technology, working with Intel and later participating with IBM, Nokia and Toshiba in the Bluetooth Special Interest Group. Ericsson's licensing activities eventually produced a Bluetooth headset and were separated into Ericsson Technology Licensing in 2000. The company's rapid growth exposed it to increasingly intense competition. Nokia used industrial design, compact form factors and scale economics to gain share, while Ericsson's technically oriented product judgments did not always match consumer preferences. The delayed development of the T28 handset compounded the problem. The model was intended for the 1998 Christmas season but reached the market only in 1999. A March 2000 fire at a Philips component plant in Albuquerque, New Mexico, further disrupted Ericsson's supply chain and was associated with substantial lost handset volume. Nokia secured alternative component sources more quickly and strengthened its market lead. Ericsson Mobile Communications launched the R380 in 2000, one of the earliest smartphones to use the Symbian operating system, then known as EPOC. It was not a commercial success, but demonstrated Ericsson's interest in combining telephony with computing and data functions. Other projects, such as the Ericsson MC218 handheld PC and experimental Bluetooth-connected or Linux-based devices, were not developed into major commercial lines. The European telecommunications downturn around 2000–2001 hit the business severely. The unit containing Ericsson Mobile Communications reportedly moved from substantial profitability in 1998 to a loss of approximately 24 billion Swedish kronor during the crisis period. Ericsson responded by reducing production employment and outsourcing handset manufacturing, including a major transfer of production to Flextronics. On 1 October 2001, the business was divided: handset design and production moved into Sony Ericsson Mobile Communications, a joint venture between Ericsson and Sony, while mobile-platform activities became Ericsson Mobile Platforms. Ericsson Mobile Communications therefore ceased to operate as the group's standalone handset company. Ericsson Mobile Platforms later combined with STMicroelectronics' mobile-platform operation in 2009 to form ST-Ericsson, while Sony acquired Ericsson's interest in Sony Ericsson in 2012 and renamed the handset business Sony Mobile Communications.

Ericsson Mobile Communications emerged from the consolidation of Ericsson's and General Electric's mobile-phone operations. The joint venture, Ericsson GE Mobile Communications, began on 1 July 1989 with Ericsson owning 60 percent and GE 40 percent. It incorporated Ericsson's handset work in Sweden, including operations in Kumla and research in Lund, alongside GE's United States manufacturing capacity in Lynchburg, Virginia. Åke Lundqvist, formerly associated with Ericsson Radio Systems, moved to the United States to lead the new company. A separate research office opened in Research Triangle Park, North Carolina, in 1990. The partnership experienced persistent coordination problems and had difficulty gaining traction in the American handset market. Ericsson increased its stake to 80 percent in early 1992, and GE left the venture's board at the end of 1993. GE ultimately sold its remaining 20 percent to Ericsson on 1 April 1998. That transaction made the handset operation wholly owned by Ericsson just as mobile telephony was becoming a core part of the wider group. On 1 March 1994, Johan Siberg became chief executive and the company adopted the Ericsson Mobile Communications name, also referred to as ECS. The company expanded rapidly during the 1990s, using recurring electronic and mechanical platforms for handset families supporting NMT, ETACS and GSM standards. Its growth brought significant production volume and strong reported profitability in 1998. It also pursued adjacent technologies, most notably Bluetooth. Work begun in 1994 developed through cooperation with Intel and participation in the Bluetooth Special Interest Group, founded in 1998 with Intel, IBM, Nokia and Toshiba. Ericsson Technology Licensing was created in 2000 to hold related technology, and Ericsson brought a Bluetooth headset to market. The competitive environment then shifted. Nokia increasingly used industrial design, smaller form factors and manufacturing scale to attract consumers and reduce component costs. Ericsson's delayed T28 handset missed its intended 1998 holiday introduction and arrived in 1999. A component-factory fire at Philips in Albuquerque in March 2000 created further supply problems. Ericsson suffered delivery delays while Nokia found alternative sources more quickly. The R380, launched in 2000, showed Ericsson's early smartphone ambitions and used EPOC, the operating system that became associated with Symbian, but did not become a commercial hit. The company also explored handheld computers and experimental Bluetooth-connected devices, though several remained prototypes or limited products. The European telecommunications crisis around the turn of the century caused severe losses. Ericsson cut production employment and outsourced handset manufacturing, including the transfer of production involving approximately 11,000 people to Flextronics. On 1 October 2001, Ericsson divided the operation into two successor businesses. Sony Ericsson Mobile Communications took over handset design and production as a joint venture with Sony, while Ericsson Mobile Platforms received the platform-development activities and supplied technology to other handset makers. Ericsson Mobile Communications consequently ceased to exist as a standalone handset company. Ericsson Mobile Platforms later combined with STMicroelectronics' platform business in 2009 to form ST-Ericsson. Sony acquired Ericsson's stake in the handset venture in 2012, after which the business became Sony Mobile Communications.

• 2001

  The company is split into successor businesses

  [1]Ericsson Mobile Communicationsen.wikipedia.org

  Handset operations move to Sony Ericsson and platform activities move to Ericsson Mobile Platforms.

• 2000

  R380 smartphone reaches the market

  [1]Ericsson Mobile Communicationsen.wikipedia.org

  Ericsson introduces the R380, an early Symbian-based smartphone.

• 1998

  Ericsson acquires the remaining GE interest

  [1]Ericsson Mobile Communicationsen.wikipedia.org

  GE sells its final 20 percent, making Ericsson the sole owner.

• 1994

  The business becomes Ericsson Mobile Communications

  [1]Ericsson Mobile Communicationsen.wikipedia.org

  Johan Siberg becomes chief executive and the wholly owned Ericsson handset subsidiary adopts its later name.

• 1992

  Ericsson raises its ownership to 80 percent

  [1]Ericsson Mobile Communicationsen.wikipedia.org

  Ericsson purchases an additional 20 percent of the joint venture.

• 1990

  Research Triangle Park office opens

  [1]Ericsson Mobile Communicationsen.wikipedia.org

  The company establishes a research-and-development office near Raleigh, North Carolina, to separate research from manufacturing.

• 1989

  Ericsson GE Mobile Communications is formed

  [1]Ericsson Mobile Communicationsen.wikipedia.org

  Ericsson and General Electric combine their mobile-phone operations in Sweden and the United States in a 60/40 joint venture.

A technically oriented Ericsson handset business serving mobile-network users and, later, emerging smartphone and Bluetooth markets. The company emphasized radio engineering, compact handset platforms and mobile technology, but faced difficulty matching Nokia's consumer design appeal, cost structure and supply-chain execution.

• Mobile phone · 1999

  Ericsson T28

  The T28 was intended to be a key compact Ericsson handset for the late-1990s consumer market. Development and launch delays meant that it missed its planned 1998 holiday introduction and arrived in 1999, when Nokia was rapidly improving its position through compact industrial design and scale. Its delayed availability became emblematic of Ericsson's difficulties in executing handset programs during the competitive transition of the period.

• Smartphone · 2000

  Ericsson R380

  The R380 was Ericsson Mobile Communications' first smartphone. It used EPOC, the operating system associated with the emerging Symbian platform, and combined cellular communication with functions associated with a handheld computer. Although it did not achieve commercial success, it represented an early attempt by a major mobile-phone maker to move beyond voice-centric handsets toward software-enabled mobile computing.

• Handheld computer

  Ericsson MC218

  The MC218 was a handheld PC developed as an OEM product based on the Psion Series 5mx. It reflected Ericsson's interest in personal information management and mobile computing alongside its conventional handset business. The device belonged to the company's broader experimentation with connected and portable computing rather than becoming a central mass-market Ericsson phone line.

• Wireless accessory · 2000

  Ericsson Bluetooth headset

  Ericsson's Bluetooth headset was the first actual product associated with the company's Bluetooth licensing and technology activity. It followed work begun inside Ericsson in 1994 and expanded through cooperation with Intel and the Bluetooth Special Interest Group. The product demonstrated a practical consumer application for short-range wireless connectivity between a mobile phone and an accessory.

• Mobile-platform technology · 2001

  Ericsson mobile platforms

  At the 2001 restructuring, Ericsson's handset-platform hardware and software activities were separated from handset production and transferred to Ericsson Mobile Platforms. Platforms such as U100 and U200 were intended for use by Ericsson and external handset manufacturers, including HTC, LG, NEC, Sagem, Sharp and Sony Ericsson, with a major strategic emphasis on third-generation UMTS technology.

• 2012

  Sony acquires Ericsson's interest in the handset ventureM&A

  Background

  The Sony Ericsson partnership had become difficult for both parent companies and was no longer aligned with Ericsson's strategic direction.

  Action taken

  Sony completed the purchase of Ericsson's share in Sony Ericsson, which was renamed Sony Mobile Communications.

  Aftermath

  Ericsson exited the Sony Ericsson handset ownership structure, while Sony continued the mobile-phone business under its own name.

  Source

• 2009

  Combine Ericsson Mobile Platforms with ST-NXP WirelessM&A

  Background

  Ericsson sought to consolidate its mobile-platform activities with a complementary operation owned by STMicroelectronics.

  Action taken

  Ericsson and STMicroelectronics combined Ericsson Mobile Platforms with ST-NXP Wireless to create the jointly owned ST-Ericsson venture.

  Aftermath

  The mobile-platform business continued under the ST-Ericsson structure rather than as an independent Ericsson Mobile Platforms company.

  Source

• 2001

  Separate handset production from mobile-platform developmentStrategy

  Background

  The handset business was under pressure from the telecommunications downturn, delayed products, supply-chain disruption and stronger competition from Nokia. Ericsson needed to reduce losses and find a partner for handset production.

  Action taken

  On 1 October 2001, Ericsson transferred handset design and production to Sony Ericsson Mobile Communications, a joint venture with Sony, while transferring mobile-platform hardware and software to Ericsson Mobile Platforms.

  Aftermath

  Ericsson Mobile Communications ceased to operate as a standalone handset company. Ericsson Mobile Platforms continued as a technology supplier and later became part of ST-Ericsson.

  Source

1. 1Ericsson Mobile Communicationsen.wikipedia.org