Mobile Devices

Ericsson Shuts Down Modem Group

19 September 2014

Telecommunications firm Ericsson (Kista, Sweden) has decided to discontinue the development of modem technology and to shift engineering resources to work on radio networks for such applications as small cell basestations.

The company said that it will deliver the M7450 LTE modem – otherwise known as Thor – but now intends to close the modem group and reduce or redeploy the workforce. The company said it is entering into negotiations with employee representatives at a local level to determine next steps.

The well-respected modem group currently employs 1,582 employees distributed across Sweden (689), India (235), Germany (216), China (206) and Finland (122). Ericsson said it has an immediate need for 500 engineers to increase R&D for radio networks, especially within small cells, energy efficient basestations and in machine-to-machine communications and that some of the parts of the modem organization have relevant skills.

The closure of the modem group appears to take Ericsson out of contention as a supplier of future 4G and 5G client modem technology going forward.

Ericsson took over the LTE thin modem operations as part of the breakup of its joint venture with STMicroelectronics in August 2013. Since then the modem organization has focused on bringing the M7450 to market which it did in August 2014, Ericsson said.

The M7450 is a multimode multiband platform supporting carrier aggregation with a single chip radio frequency transceiver and support for more than 20 bands. The complete modem is a highly integrated two-chip solution, delivering download speeds up to 150Mbps.

The modem has been certified by state-owned China Mobile Ltd. and this helped Ericsson achieve a number of design wins. However being in a position to integrate the modem with the application processor is something that helped propel Qualcomm into a leading position as vendor of application processors for smartphones.

The development of integrated modem-application processors is what ST-Ericsson was created to do and the break-up of the joint venture and the return of the modem team to Ericsson effectively put a block across a development roadmap. MediaTek and Samsung are following Qualcomm in integrating LTE while Intel's lack of an integrated LTE modem is one thing that is holding back the company's penetration of the smartphone space.

"We have concluded the first phase of the modems strategy by successfully delivering the Ericsson M7450 modem. However, given the modem market dynamics and the development in small cells and indoor coverage markets, we believe resource re-allocation is more beneficial for the Ericsson Group and our customers overall," said Hans Vestberg, CEO of Ericsson, in a statement.

Related links and articles:

IHS mobile devices and networks research

News articles:

Ericsson Claims Design Wins for Modem Chipset

Ericsson Acquires MetraTech to Further IoT Offerings

Qualcomm, SMIC Partner for 28nm Snapdragon Production

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