Ericsson grows market dominance, but warns of Q4 troubles

Ericsson cautioned that its fourth-quarter profits from infrastructure sales would be impacted by lower-margin sales. The world's largest network equipment vendor said it believes that a global economic uncertainty could make mobile operators hesitate over equipment buying decisions.

However, the company also reported at its annual capital market day in Stockholm on Wednesday that its share of the global mobile infrastructure market jumped from 32 per cent in May to 36 per cent today. Ericsson said that this surge now made the company 100 per cent larger than Huawei, the second largest infrastructure player, and was also 40 per cent larger than its closest competitor in the telecom services business.

Also of note was the announcement from the Swedish firm that patents and licensing would now "become a key revenue area with growth opportunities," according to an AFP report.

Ericsson holds some 27,000 patents and generated over €500 million in revenue from this source last year. "We have a broad portfolio of patents--not only within wireless technology--on which we want to capitalize," Ericsson CEO Hans Vestberg told Dow Jones Newswires.

However, the company said that, despite growing market share, it has already moved to take account of the anticipated downturn in operator capital expenditures. Ericsson CFO Jan Frykhammar said he had already moved to curb Ericsson's own costs and had contingency plans should the environment get tougher, according to Reuters. "We are starting to put the brakes on," he noted, adding that the last downturn had enabled the company to gain market share, due to its financial resources.

Frykhammar also added that winning modernisation projects is a central strategy for winning market share even at the expense of short-term margin pressure.

For more:
- see this AFP article
- see this Dow Jones Newswire article
- see this Reuters article

Related Articles:
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Ericsson posts Q3 profit, but N. American sales continue to decline
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