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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Glenn who wrote (23125)	4/2/1999 2:01:00 AM
From: MrThesp	Read Replies (1) \| Respond to of 90042

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To: Glenn who wrote (23125)	4/3/1999 12:48:00 AM
From: Junkyardawg	Read Replies (1) \| Respond to of 90042

Posted on Yahoo Ericsson Embarks On 'String of Pearls' Campaign By Joe McGarvey April 2, 1999 12:25 PM ET Fresh from resolving lingering uncertainties over its wireless strategy, Swedish telecommunications giant Ericsson is expected to step up its efforts to add to its data networking expertise. The merger and acquisition grapevine has been abuzz with rumors over the past couple of weeks that Ericsson is about to pull the trigger on a billion-dollar deal to acquire a major U.S. data equipment supplier. Fore Systems, a U.S.-based maker of high-speed Asynchronous Transfer Mode gear that has worn the mantle of "the company most likely to be acquired next" for the past few years, has been linked to Ericsson in several published reports. In a speech to shareholders at the end of March, however, Ericsson Chief Executive Officer Sven-Christer Nilsson threw water on the flames of acquisition fever by announcing that the company is more interested in building market share than acquiring it through multibillion-dollar purchases. "Ericsson's strategy is to acquire supplementary state-of-the-art knowledge, rather than market share," Nilsson said. "Ericsson's sights are set on small and medium-size companies, and also on so-called start-ups that are still in the development stage." Industry speculation of an Ericsson buying binge has been fueled by Ericsson's recent agreement to cross-license wireless technology with Qualcomm, which ended a dispute that had put a hold on the company's third-generation wireless plans. In addition, industry observers have speculated that Ericsson will make a major move to counter the recent spate of acquisitions by telecommunications rivals Alcatel and Siemens. A spokeswoman for the company, who declined to talk about acquisition rumors, said Ericsson will continue its "string of pearls" policy, which is designed to provide the company with an end-to-end data portfolio made up of a collection of technologies and products strung together through acquisitions and investments. In keeping with this policy, Ericsson last month increased its investment in well-regarded Internet Protocol (IP) router maker Juniper Networks. On that same day, the company announced a reseller agreement with Memotec Communications, which makes frame relay access equipment. In addition to acquiring the rights to resell Juniper's IP backbone router, the undisclosed investment - which some analysts estimate to be worth between $10 million and $20 million - pretty much negates any need to acquire a backbone equipment provider, such as Fore Systems, analysts say. Instead of taking on a major acquisition, John Ryan, a principal analyst at the Ryan Hankin Kent research firm, believes Ericsson's next target will be a company that makes equipment designed to enable telecommunications companies to transition voice traffic from circuit-based networks onto data networks. Although Ryan declined to identify potential acquisition or investment candidates for Ericsson, several start-ups meet the general description; many of them are located in the Boston area. Among those in or around Boston are Taqua Systems and Sonus Networks. Other start-ups in the voice-to-data transition space include Advanced Switching Communications, Salix Technologies and TransMedia Communications.