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".
In my opinion, the core of the problem is the CEO of ST-Ericsson. The company is indeed facing difficult times, but to create a game changing event, you need more than just a medium to good CEO, you need a brilliant CEO (a visionnary would be even better, but there is shortage of them - dixit AMD :-)).
ST-Ericsson is competing in a field where the brightest companies of today are fighting a war to death: Apple, Samsung, Qualcomm, Texas Instruments, Intel, Broadcom, Nvidia. The current product line of ST-Ericsson is just good, nothing really innovative. No strong differentiator in the smartphone/tablet market. To make a come back, you need a ground breaking innovation, something that will make your customer win over their competition. ST-Ericsson does have that today, so no real come back to be expected.
My message to Carlo Bazotti and Hans Vestberg:
- either urgently move Delfassy to a VP position, and get yourself some very agressive CEO
- or sell ST-Ericsson to Nvidia, AMD or Intel (Ottelini sure would look into buying it) at the best price you can get, and see the shares of your respective companies double in a few months.
Well 2012 will be a bumper year with a new product offering in the smartphone market with a number of major handset providers, beyond that it becomes murky, if they dont break even by end of 2012 i think they will exit
Background: I worked for an associated company for many years.
Good comments all. Having at first succeeded in the cellular “protocol wars” of the early 90s, Ericsson acquired an over confidence. Her international handset divisions reported North American and Asian market development towards big screen and battery models even before the advent of smart phones. Their opinion was that in the coming battle between computers and cell phones, the “computer first but also a cell phone” approach was right. Ericsson thought those few to be Smartphones would be well served by Symbian…the exact opposite idea of their subsidiaries. They also missed the importance of data while insisting they had an early lead.
This all resulted in a merger of the handset business with Sony and splitting off Ericsson Mobile ICs…platforms. Regretfully nothing changed until Sony was very irritated threatening that, “Something must change or the relationship will terminate.” How did this involve Ericsson now Ericsson-ST? Sony-Ericsson was a captive (and by far the largest) customer. They were insulated from the market delivery chronically late and over price IC and SW stacks. The mobile chip set was also slow and provided limited graphics. Eventually that didn’t matter because the “computer part” of the phone came to dominate but Ericsson-ST had no good offering. Sony saw this (not admitted publicly) as at least a hindrance and worse possibly a way for Ericsson to reach into the venture and take more than their fair share. All that the Sony Ericsson subsidiaries feared came true and this fell through to punish Ericsson-ST. So much for this kind of vertical integration!
What are the engineering and design challenges in creating successful IoT devices? These devices are usually small, resource-constrained electronics designed to sense, collect, send, and/or interpret data. Some of the devices need to be smart enough to act upon data in real time, 24/7. Are the design challenges the same as with embedded systems, but with a little developer- and IT-skills added in? What do engineers need to know? Rick Merritt talks with two experts about the tools and best options for designing IoT devices in 2016. Specifically the guests will discuss sensors, security, and lessons from IoT deployments.