Ericsson dumps LTE modem business

The modem unit has suffered as the devices have increasingly become an integrated feature

Full-featured, integrated chips and tough competition have forced telecom vendor Ericsson to halt all future development of its LTE modems.

The move comes just over a year after Ericsson took over the LTE modem operations of its joint venture with STMicroelectronics as that relationship broke up. Since then, modems have moved from being a separate component to becoming integrated with the main processor on smartphones and tablets, a development that signals the end of making a living by selling separate chipsets.

In addition, strong competition and an accelerating pace of development has made the modem business unsustainable, according to Ericsson. The company will still deliver the M7450 to customers. The multi-mode modem supports speeds at up to 150Mbps and more than 20 radio bands.

The integration trend may be bad for Ericsson's modem unit, but is good for consumers because it means cheaper LTE smartphones. For example, Qualcomm announced the Snapdragon 210 processor with LTE last week, which will power low-cost smartphones and tablets starting in the first half of next year.

Qualcomm didn't reveal how much devices based on the new processor will cost. However, looking at the cost of devices powered by current Snapdragon 200 processors, prices around US$100 without a contract are possible.

Instead of investing in developing new modems, Ericsson wants to spend a larger chunk of its R&D budget on areas such as small cells and machine-to-machine services, the company said. It estimates the R&D cost for modems will total approximately 2.6 billion Swedish kronor ($363 million) for the full year.

The modem unit has 1,582 employees in Sweden, India, Germany, China and Finland. Some of them will be able to stay on as Ericsson has an immediate need to hire 500 people for its R&D department, but many will also lose their jobs. How many still hasn't been decided, according to Ericsson.

Send news tips and comments to mikael_ricknas@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags telecommunicationEricsson

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Mikael Ricknäs

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?