| Ericsson reduced its R & D |
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Ericsson's results for the fourth quarter was significantly lower than expected. The company expects to reduce its R & D by up to 3.6 billion this year. This explains why Vestberg.
Ericsson reports results for the fourth quarter of 2011 was a cold
shower. Both sales and earnings were significantly worse than expected,
and shares were at lunch plummeted by 14 percent.
Vestberg explains the bad figures, among other things, lower sales in North America and Russia. In the U.S., one of Ericsson's major customers AT & T delayed investment because management put their time trying to buy T-Mobile, a business that does not happen. Ericsson's sales network in North America fell by 27 percent between the third and fourth quarters. Vestberg also refers to the company's conscious strategy last year to try to regain first plastic in the European market, which has meant a heavy pressure on prices. The strategy for 2011 was thus to gain market share. This year is about to benefit from our strong position, says Vestberg to new technologies. This means that projects in Europe must function correctly, and that we need to increase sales of our operation-supported (OSS) and business support systems (BSS) for operators. An activity that we strengthened through the acquisition of Telcordia. Furthermore, we must get the proper spin on the new router, we launched late last year, which cost a lot of R & D resources, he says. In early 2011 counted Vestberg with a bet between 31 and 33 billion on R & D. He spent 32.6 billion dollars. Last year we decided to make a special effort on products for the 4G standard LTE and IP-page. We wanted to pull away from our competitors. Now go back to more normal levels. We do not need to invest as much on CDMA and mobile modules, as we phase out. Ericsson expects this year to add 29-31 billion. This means a reduction of between 1.6 and 3.6 billion compared to 2011. |
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