Jim - <<The same is true of infrastructure.>>
Have to disagree here. They won't have cdmaOne phones until next year because they did not buy (nor do they currently have) a cdma handset manufacturing operation. But they did buy an excellent infrastructure business with real products, as well as real sales, engineering, and manufacturing staff.
You're right, I was being overly glib and the reasons are not precisely 'the same'. So to close out my posts on this topic, let me be clear. The reasons I would give for Ericsson being unable to turn around CDMAOne immediately are:
1) In any acquisition, it always takes a substantial amount of time for the new piece to be really incorporated into the new company. The sales force has to be trained to sell the very different product. There is a lot of time wasted on reorg's. There is especially high attrition of many of the better employees in the first year. Etc. In addition, Ericsson has some special hurdles:
2) Ericsson stated in the joint CC that they would be using the SD facility as a design center for CDMAOne and thus I suspect that some of their new acquisition will be pulled off to do handset design. In addition, Ericsson alluded to incorporating their switches into the product offerings.
3) Manufacturing capacity. The Qualcomm manufacturing capacity is probably not that high.
4) Both 2 and 3 are exacerbated by the recent layoffs at Qualcomm. They downsized by 700 people, most of whom probably came from the infras division. That is what, 50%?, of what they got from Qualcomm? That is a big deal.
Finally, note that even if Ericsson could become a big player in CDMAOne immediately, they are still one-among-many in the CDMAOne community, whereas in W-CDMA they are *the* leader. In fact Ericsson repeatedly stressed W-CDMA in the joint conference call, and they would be foolish to do otherwise unless their customers are insistant.
Clark
PS While I admit to being overly glib at times, so is The war is over. We won. Certainly I will stipulate that we won some things (primarily validation and royalties), but there are other things that we did not win and thus must be left to others to fight (e.g. mode harmonization). I tend to concentrate on the latter precisely because these are where the real uncertainty lies, and the result of this concentration is that I look negative. C'est la guerre.<g> |
