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Telefonaktiebolaget LM Ericsson
Publicly traded aktiebolag
Traded asNasdaq StockholmERIC A, ERIC B
NASDAQERIC
IndustryTelecommunications equipment
Networking equipment
FoundedStockholm, Sweden
(1876; 144 years ago (1876))
FounderLars Magnus Ericsson
HeadquartersKista, Stockholm, Sweden
Area served
Worldwide
Key people
Ronnie Leten
(Chairman)
Börje Ekholm
(President and CEO (Chief Executive Officer))
ProductsMobile and fixed broadband networks, consultancy and managed services, TV and multimedia technology
RevenueIncrease 227.216 billion kr (2019)[1]
Increase 10.564 billion kr (2019)[1]
Increase 1.840 billion kr (2019)[1]
Total assetsIncreaseTelefonaktiebolaget L M Ericsson (lit. Telephone Stock Company L.M. Ericsson), commonly known as Ericsson, is a Swedish multinational networking and telecommunications company headquartered in Stockholm. The company offers services, software and infrastructure in information and communications technology for telecommunications operators, traditional telecommunications and Internet Protocol (IP) networking equipment, mobile and fixed broadband, operations and business support services, cable television, IPTV, video systems, and an extensive services operation.

Ericsson had a 27% market share in the 2G/3G/4G mobile network infrastructure market in 2018, thus being the largest such non-Chinese company.[3]

The company was founded in 1876 by Lars Magnus Ericsson[4] and was taken over by the Wallenberg family in 1960; today, the family, through its holding company Investor AB, owns a controlling 22.53% voting power. As of 2016 it is headquartered in Stockholm, Sweden. The company employs around 95,000 people and operates in around 180 countries.[5][6] Ericsson holds over 49,000 granted patents as of September 2019, including many in wireless communications.[7] Ericsson is the inventor of Bluetooth technology.[8] Ericsson leads the implementation of 5G worldwide, partly through the use of massive MIMO technology.[9][10]

History

Foundation

Lars Magnus Ericsson

Lars Magnus Ericsson began his association with telephones in his youth as an instrument maker. He worked for a firm that made telegraph equipment for the Swedish government agency Telegrafverket. In 1876, at the age of 30, he started a telegraph repair shop with help from his friend Carl Johan Andersson in central Stockholm and repaired foreign-made telephones. In 1878 Ericsson began making and selling his own telephone equipment. His telephones were not technically innovative. In 1878 he made an agreement to supply telephones and switchboards to Sweden's first telecommunications operating company, Stockholms Allmänna Telefonaktiebolag.[4]

International expansion

Ericsson had a 27% market share in the 2G/3G/4G mobile network infrastructure market in 2018, thus being the largest such non-Chinese company.[3]

The company was founded in 1876 by Lars Magnus Ericsson[4] and was taken over by the Wallenberg family in 1960; today, the family, through its holding company Investor AB, owns a controlling 22.53% voting power. As of 2016 it is headquartered in Stockholm, Sweden. The company employs around 95,000 people and operates in around 180 countries.[5][6] Ericsson holds over 49,000 granted patents as of September 2019, including many in wireless communications.[7] Ericsson is the inventor of Bluetooth technology.[8] Ericsson leads the implementation of 5G worldwide, partly through the use of massive MIMO technology.[9][10]

Lars Magnus Ericsson began his association with telephones in his youth as an instrument maker. He worked for a firm that made telegraph equipment for the Swedish government agency Telegrafverket. In 1876, at the age of 30, he started a telegraph repair shop with help from his friend Carl Johan Andersson in central Stockholm and repaired foreign-made telephones. In 1878 Ericsson began making and selling his own telephone equipment. His telephones were not technically innovative. In 1878 he made an agreement to supply telephones and switchboards to Sweden's first telecommunications operating company, Stockholms Allmänna Telefonaktiebolag.[4]

International expansion

An early, wooden, Ericsson telephone, made by the Ericsson Telephone Co. Ltd., of Nottingham, England, it is now in the collection of Thinktank, Birmingham Science Museum.

As production grew in the late 1890s, and the Swedish market seemed to be reaching saturation, Ericsson expanded into foreign markets through a number of agents. The UK (Ericsson Telephones Ltd.) and Russia were early markets, where factories were later established improve the chances of gaining local contracts and to augment the output of the Swedish factory. In the UK, the National Telephone Company was a major customer; by 1897 sold 28% of its output in the UK. The Nordic countries were also Ericsson customers; they were encouraged by the growth of telephone services in Sweden.[4]

Other countries and colonies were exposed to Ericsson products through the influence of their parent countries. These included Australia and New Zealand, which by the late 1890s were Ericsson's largest non-European markets. Mass production techniques now firmly established; telephones were losing some of their ornate finish and decoration.[11]

Despite their successes elsewhere, Ericsson did not make significant sales into the United States. The Bell Group, Kellogg and Automatic Electric dominated the market. Ericsson eventually sold its U.S. assets. Sales in Mexico led to inroads into South American countries. South Africa and China were also generating significant sales. With his company now multinational, Lars Ericsson stepped down from the company in 1901.

Automatic equipment

LM Ericsson's former headquarters at Telefonplan in Stockholm, see LM Ericsson building

Ericsson ignored the growth of automatic telephony in the United States and concentrated on manual exchange designs. Their first dial telephone was produced in 1921, although sales of the early automatic switching systems were slow until the equipment had proven itself on the world's markets. Telephones of this period had a simpler design and finish, and many of the early automatic desk telephones in Ericsson's catalogues were magneto styles with a dial on the front and appropriate changes to the electronics. Elaborate decals decorated the cases.[4] World War I, the subsequent Great Depression, and the loss of its Russian assets after the Revolution slowed the company's development while sales to other countries fell by about half.[12]

Shareholding changes

The acquisition of other telecommunications companies put pressure on Ericsson's finances; in 1925, Karl Fredric Wincrantz took control of the company by acquiring most of the shares. Wincrantz was partly funded by Ivar Kreuger, an international financier. The company was renamed Telefonaktiebolaget L M Ericsson. Kreuger s

As production grew in the late 1890s, and the Swedish market seemed to be reaching saturation, Ericsson expanded into foreign markets through a number of agents. The UK (Ericsson Telephones Ltd.) and Russia were early markets, where factories were later established improve the chances of gaining local contracts and to augment the output of the Swedish factory. In the UK, the National Telephone Company was a major customer; by 1897 sold 28% of its output in the UK. The Nordic countries were also Ericsson customers; they were encouraged by the growth of telephone services in Sweden.[4]

Other countries and colonies were exposed to Ericsson products through the influence of their parent countries. These included Australia and New Zealand, which by the late 1890s were Ericsson's largest non-European markets. Mass production techniques now firmly established; telephones were losing some of their ornate finish and decoration.[11]

Despite their successes elsewhere, Ericsson did not make significant sales into the United States. The Bell Group, Kellogg and Automatic Electric dominated the market. Ericsson eventually sold its U.S. assets. Sales in Mexico led to inroads into South American countries. South Africa and China were also generating significant sales. With his company now multinational, Lars Ericsson stepped down from the company in 1901.

Automatic equipment

Other countries and colonies were exposed to Ericsson products through the influence of their parent countries. These included Australia and New Zealand, which by the late 1890s were Ericsson's largest non-European markets. Mass production techniques now firmly established; telephones were losing some of their ornate finish and decoration.[11]

Despite their successes elsewhere, Ericsson did not make significant sales into the United States. The Bell Group, Kellogg and Automatic Electric dominated the market. Ericsson eventually sold its U.S. assets. Sales in Mexico led to inroads into South American countries. South Africa and China were also generating significant sales. With his company now multinational, Lars Ericsson stepped down from the company in 1901.

Ericsson ignored the growth of automatic telephony in the United States and concentrated on manual exchange designs. Their first dial telephone was produced in 1921, although sales of the early automatic switching systems were slow until the equipment had proven itself on the world's markets. Telephones of this period had a simpler design and finish, and many of the early automatic desk telephones in Ericsson's catalogues were magneto styles with a dial on the front and appropriate changes to the electronics. Elaborate decals decorated the cases.[4] World War I, the subsequent Great Depression, and the loss of its Russian assets after the Revolution slowed the company's development while sales to other countries fell by about half.[12]

Shareholding changes

The acquisition of other telecommunications companies put pressure on Ericsson's finances; in 1925, Karl Fredric Wincrantz took control of the company by acquiring most of the shares. Wincrantz was partly funded by Ivar Kreuger, an international financier. The company was renamed Telefonaktiebolaget L M Ericsson. Kreuger started showing interest in the company, being a major owner of Wincrantz holding companies.[4]

Wallenberg era begins

Ericsson was saved from bankruptcy and closure with the help of banks including Ivar Kreuger, an international financier. The company was renamed Telefonaktiebolaget L M Ericsson. Kreuger started showing interest in the company, being a major owner of Wincrantz holding companies.[4]

Wallenberg era beginsEricsson was saved from bankruptcy and closure with the help of banks including Stockholms Enskilda Bank (now Skandinaviska Enskilda Banken) and other Swedish investment banks controlled by the Wallenberg family, and some Swedish government backing. Marcus Wallenberg Jr. negotiated a deal with several Swedish banks to rebuild Ericsson financially. The banks gradually increased their possession of LM Ericsson "A" shares, while ITT was still the largest shareholder. In 1960, the Wallenberg family bought ITT‘s shares in Ericsson, and has since controlled the company.[4]

Market development

In the 1920s and 1930s, the world telephone markets were being organized and stabilized by many governments. The fragmented town-by-town systems serviced by small, private companies that had evolved were integrated and offered for lease to a single company. Ericsson obtained some leases, which represented further sales of equipment to the growing networks. Ericsson got almost one-third of its sales under the control of its telephone operating companies.[4]

Further development

Ericsson introduced the world's first fully automatic mobile telephone system, MTA, in 1956.[13] It released one of the world's first hands-free speaker telephones in the 1960s. In 1954, it released the Ericofon. Ericsson crossbar switching equipment was used in telephone administrations in many countries.[14] In 1983 the company introduced the ERIPAX suite of network products and services.

1995–2003: emergence of the Internet

In the 1990s, during the emergence of the Internet, Ericsson was regarded as slow to realize its potential and falling behind in the area of IP technology.[15] But the company had established an Internet project in 1995 called Infocom Systems to exploit opportunities leading from fixed-line telecom and IT. CEO Lars Ramqvist wrote in the 1996 annual report that in all three of its business areas – Mobile Telephones and Terminals, Mobile Systems, and Infocom Systems – "we will expand our operations as they relate to customer service and Internet Pr

Ericsson introduced the world's first fully automatic mobile telephone system, MTA, in 1956.[13] It released one of the world's first hands-free speaker telephones in the 1960s. In 1954, it released the Ericofon. Ericsson crossbar switching equipment was used in telephone administrations in many countries.[14] In 1983 the company introduced the ERIPAX suite of network products and services.

1995–2003: emergence of the Internet

The unit is active in 180 countries; it supplies managed services,[108] systems integration, consulting, network rollout, design and optimization, broadcast services, learning services and support.[104][109][110][111]

The company also works with television and media, public safety, and utilities. Ericsson claims to manage networks that serve more than 1 billion subscribers worldwide,[112] and to support customer networks that serve more than 2.5 billion subscri

The company also works with television and media, public safety, and utilities. Ericsson claims to manage networks that serve more than 1 billion subscribers worldwide,[112] and to support customer networks that serve more than 2.5 billion subscribers.

Ericsson's Broadcast Services unit was evolved into a unit called Red Bee Media, which has been spun out into a joint venture. It deals with the playout of live and pre-recorded, commercial and public service television programmes, including presentation (continuity announcements), trailers, and ancillary access services such as closed-caption subtitles, audio description and in-vision sign language interpreters.[113] Its media management services consist of Managed Media Preparation and Managed Media Internet Delivery.[114]

Divested businessesSony Ericsson Mobile Communications AB (Sony Ericsson) was a joint venture with Sony that merged the previous mobile telephone operations of both companies. It manufactured mobile telephones, accessories and personal computer (PC) cards. Sony Ericsson was responsible for product design and development, marketing, sales, distribution and customer services. On 16 February 2012, Sony announced it had completed the full acquisition of Sony Ericsson,[115] after which it changed name to Sony Mobile Communications, and nearly a year later it moved headquarters from Sweden to Japan.

Mobile (cell) tele

As a joint venture with Sony, Ericsson's mobile telephone production was moved into the company Sony Ericsson in 2001. The following is a list of mobile phones marketed under the brand name Ericsson.

Ericsson Mobile Platforms existed for eight years; on 12 February 2009, Ericsson announced it would be merged with the mobile platform company of STMicroelectronics, ST-NXP Wireless, to create a 50/50 joint venture owned by Ericsson and STMicroelectronics.[117] This joint venture was divested in 2013 and remaining activities can be found in Ericsson Modems and STMicroelectronics. Ericsson Mobile Platform ceased being a legal entity early 2009.[118]

Ericsson Enterprise

Starting in 1983 Ericsson Enterprise provided communications systems and services for businesses, public entities and educational institutions. It produced products for voice over Internet protocol (VoIP)-based private branch exchanges (PBX), wireless local area networks (WLAN), and mobile intranets. Ericsson Enterprise operated mainly from Sweden but also operated through regional units and other partners/distributors. In 2008 it was sold to Aastra.[119][120]

.mobi and mobile Internet

Ericsson was an official backer in the launch of the .mobi top level domain created specifically for the mobile internet.[121] Since the launch of .mobi in September 2006, Ericsson has launched SonyEricsson.mobi, the mobile portal of Sony Ericsson.

Controversies

On 7 December 2019, Ericsson agreed to pay more than $1.2 billion (€1.09 billion) to settle US criminal and civil investigations into foreign corruption. US authorities accused the company of conducting a campaign of corruption between 2000 and 2016 across China, Indonesia, Vietnam, Kuwait and Djibouti. Ericsson admitted to paying bribes, falsifying books and records and failing to implement reasonable internal accounting controls in an attempt to strengthen its position in the telecommunications industry.[122][123][124]

See also