Telefonaktiebolaget LM Ericsson will restructure and hire 500 more engineers to better meet demand for multimedia products and services, Ericsson’s chief executive officer said Friday.
Starting in 2007, Ericsson will reorganize into three units: networks, global services, and multimedia. The new engineers will primarily work in the multimedia group, and the bulk of them will be based in Sweden.
The new group will help Ericsson better understand what types of multimedia services might become popular and how demands might vary, said Carl-Henric Svanberg, president and chief executive officer. “We and operators are still on a learning curve. When it comes to voice it’s very easy,” he said. “But with multimedia, what does a 13-year-old in Germany want and does an American 13-year-old feel the same? And that’s much different than an adult in China.”
The new group will also aim to better leverage the company’s relationship with Sony Corp. and with their mobile phone joint venture Sony Ericsson Mobile Communications AB. “When it comes to multimedia, we have exciting assets in Sony Ericsson and at Sony. We just haven’t put it together and it’s been embedded further down in the organization,” he said.
Svanberg offered an example of how Sony and Ericsson products might grow increasingly complementary. Currently, users of Sony Ericsson Cyber-shot camera-phones can send photographs to an online blog. Soon, standalone Cyber-shot cameras are also likely to include connectivity so that users can send photos to a blog, he said. Because Ericsson supplies wireless network infrastructure and develops some chips for mobile devices, that type of product and application could be created through an alliance between Sony and Ericsson.
The new networks group, which combines several existing network equipment groups, will have a renewed focus on converged networks that will help support some of the emerging multimedia services in the home. “In the perfect world we will have a converged network where you won’t know if you’re speaking on a mobile or a fixed network,” Svanberg said. Similarly, a user could be watching TV at home, pick up a mobile phone to watch the same program while moving around the house and then continue watching while moving to an outside location. Such a service would operate over connected wireless and wireline networks.
The third new business unit, global services, combines Ericsson’s existing professional services and network rollout groups and will focus on services for operator customers.
Ericsson acquired most of U.K. telecommunications equipment vendor Marconi Corp. PLC late last year and is in the process of laying off 1,600 people as it digests the new company. That acquisition is part of a recent wave of consolidation in the competitive network equipment market, including the merger of Lucent Technologies Inc. and Alcatel SA and the combination of Nokia Corp.’s and Siemens AG’s networks groups.