Interesting story Peter...I would tend to agree, this can't go as is for too long...Ericsson is big but bleeding $900M cash in one year must be painful even for them...I would expect dramatic scale down of R&D, and focus on getting sales of already designed chips...layoffs to follow? Kris
Well remember the ramping debt is shared so it is only $450 million each for ST and Ericsson. And who knows it might be better than that.
But that only 2011, what about the situation at the end of 2012?
ST-Ericsson has already indicated 500 jobs are set to be "affected" by restructuring.
It will better help Ericsson if it focuses towards deploying new technologies on the switch side and promoting use of it as it has done fairly good on the control room/ network room electronics. If everyone will go behind tablet and smartphone market the switch room area will remain dry.
Really tough for them with the uncertain economic climate adding to their sorrow. I think they started going downhill from the start of 2008 itself when the smartphones appearing on the scenes. Their STB market also isn't giving them the margins to keep other wireless chip designs going, so am keeping my fingers crossed on this one. They could be a prospective sale or candidate for split up as early as Q1-2012.
NxP did a smart thing by selling it's wireless business unit to ST. They sold it because it is an added weight that pulls them down on one side. So the lesson is "one should get to equilibrium at any cost".