OXFORD, United Kingdom—Kurt Hellstrom, Ericsson CEO, has given a downbeat view on the cell-phone market claiming there are no clear signs of a recovery. The company, which holds a dominant position in winning third-generation (3G) contracts, predicted that the overall market would achieve nil or only modest growth in 2001 and 2002. The prospect of this tough business environment, according to Hellstrom, has forced the company to focus on building up its relationship with the top 10 cellular operators worldwide, at the expense of smaller or start-up service providers.
Not known for his natural enthusiasm, Hellstrom said that the joint venture with Sony to design and market handsets would have a more difficult path to profitability than previously expected. He added that the company would take further action, if necessary, to help it get back into the black financially, hinting that more than the 15,000 job cuts already in progress might be needed.
However, there does seem to be some blue sky visible with the hope that Ericsson would increase its share of the General Packet Radio Service (GPRS) market from current levels. “The number of mobile subscribers continues to grow with 50 to 60 million new subscribers every quarter. GPRS is starting now. The technology is in place, the networks are stable and handsets are in the market. It is my firm belief that GPRS will accelerate over the rest of this year and next year,” Hellstrom said.
