Ericsson widens mobile gear lead with lower margins

By TelecomLead Team: Wireless equipment maker Ericsson said it achieved a leading
stance in the industry last year as it sacrificed margins in exchange for
expanding its client base. Also, it added that the strategy of expanding
its footprint with operators had been successful.

“Last year we were focusing on gaining market share,
the early indication right now when we have closed 2011 is that we went from 32
percent market share to 38 percent market share in mobile infrastructure,” said , chief executive Hans  Vestberg, Ericsson.

Ericsson’s core profit halved in the fourth quarter as it
was hit by lower margins and a slowdown in the industry.  However,
the company anticipates that margins would remain under pressure for a couple
of quarters as low margin projects and higher services sales dominate the
business mix.

Consolidating its position in the market will mean Ericsson can cash
in on the revolution in mobile telephony, driven by smartphones and
tablets that are generating huge volumes of data traffic in networks.

“Last year we ended, if you take high data traffic
smartphones, with roughly 10 percent of subscribers having that. It shows how
quickly it has grown, but also shows how much is left,” Vestberg added.

Ericsson’s nearest rivals in mobile networks are Nokia
Siemens Networks and China’s Huawei.

Meanwhile ABI
Research noted that Ericsson is leading the market due to its LTE standards

An ABI Research analyst at the Mobile World Congress
said that Ericsson played the standards game for a winning hand
in LTE. They are neither the first nor the last to play that game.

Nokia and Nokia Siemens Networks together had the second
highest number of contributions, according to an analysis of LTE contributions
to the 3GPP RAN1 to 3GPP RAN3 standards, ABI said.

Chinese telecom gear maker Huawei came third and was the
leading contributor in 2010 and the first half of 2011, ABI said.

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