March 13, 2018

Ericsson and Nokia are now direct rivals. How do they compare?

“SUCCESS is toxic,” says Risto Siilasmaa, Nokia’s chairman, as snowflakes swirl in the wind outside. Asked what lesson to draw from his firm’s collapse, which started a decade ago, he underlines the dangers of doing too well. In its heyday, Nokia was a monster; its market capitalisation surpassed $290bn in mid-2000 and by 2007 it accounted for 40% of global handset sales. Yet its dominance in hardware, which encouraged a relaxed attitude towards software, bred failure. It is now worth $33bn.

No executive at Ericsson, Nokia’s big European rival based some 400km to the west near Stockholm, would put it quite that way. But the experience of the Swedish firm has been strikingly similar. Early this decade Ericsson provided 40% of the world’s mobile infrastructure and its market capitalisation hovered above $40bn. Now both numbers are about half that.

The two firms are also direct competitors once again, which invites assessment of who is ahead. Another question is whether European…Continue reading

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