You don’t make the decision to wind down a 130-year-old business without a little bit of angst, said Hans Vestberg, CEO of Ericsson, reflecting on his company’s decision to end a joint partnership with Sony last year. But at a certain point, logic has to trump emotion.
“The whole handset business has transformed from being an extension of the network,” Vestberg said Tuesday in an interview with GigaOM before a media briefing in San Francisco about the future trends (covered here by Kevin Fitchard earlier) that the wireless networking equipment maker is poised to exploit. While Ericsson’s carrier customers may still be in denial about the shift in power from the network to the handset, Vestberg saw it happen firsthand while Sony Ericsson fell further and further behind, leading to a painful but necessary decision in October 2011.
“For us it was emotionally tough to drop it, but strategically it was easy.” Vestberg said. “When you start losing market share it’s really tough to gain it back, you need the product portfolio and presence in many markets.”
Now Ericsson is focused completely on its equipment business, helping carriers build out next-generation wireless networks that can accommodate the rapid shift from fixed desktop computers to mobile computers like smartphones and tablets. By 2017 the company expects that there were be 5 billion mobile broadband users, three times as many people as are using that technology today.
It expects that the concept of HetNets — vast, sprawling wireless networks made up of many different types of short-range and long-range radio technologies — will become a standard practice in the wireless networking business. We’ve covered the concepts behind HetNet quite a bit this year, but Vestberg doesn’t expect it to develop overnight.
“We don’t want people to believe that this is so simple,” he said, citing the complexities involved in making sure wireless networks of overlapping cells can operate reliably without interference and the commitment it takes to make sure there is enough backhaul to connect HetNets to the broader Internet.