Ericsson's workhorse division, the network-building arm, is doing just fine. Business is a bit slow, but that's an industrywide effect. Ericsson is still taking market share from rivals such as Nokia Siemens, a joint venture of (you guessed it!) Nokia
"The 3G side is rising while emerging markets are moving a little bit slower," CEO Carl-Henric Svanberg told Swedish newspaper Dagens Nyheter. "The weaknesses in our report are temporary." And Ericsson's footprint is enormous: Here in North America, there's Ericsson hardware in the networks of Verizon Wireless
That's the good news. The bad news is that both of Ericsson's major joint ventures are losing money, dragging down the overall results. The chip-design venture with STMicroelectronics and the Sony Ericsson handset partnership with Sony
I wouldn't be surprised if Ericsson choses to end those efforts in the near future, either by selling its joint-venture stakes back to its respective partners, or by spinning those operations off into stand-alone businesses. This end-to-end product portfolio makes sense in theory, but not so much in practice. And with Svanberg stepping out right about now, this would be a great time for the new regime to reshape Ericsson.
Do you think Ericsson should keep throwing money after the handset market? Show me the error of my ways in the comments below -- or voice your heartfelt agreement.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Bad Swede! Nokia and Sprint Nextel are Motley Fool Inside Value picks. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.
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