Under the command of
Ericsson Radio Systems present CEO Lars Ramqvist, a new joint venture company was formed together with
General Electric July 1, 1989, under the name
Ericsson GE Mobile Communications. The company consisted of all mobile phone activity of both companies in Sweden and USA. Ericsson owned 60% of the company, and General Electric owned 40%. In this fusion GE contributed, among other things, a factory of some 1,600 employees in
Lynchburg, Virginia. Ericsson Radio Systems former CEO Åke Lundqvist moved to the US as CEO for the new company, which also controlled the mobile handset activities in
Kumla and the research facility in
Lund. Mobile telephony, at this time, constituted 14% of the billing in the business unit for radio communications at Ericsson. In 1990 Ericsson GE Mobile Communications, at the initiative of Åke Lundkvist, opened a new office for research and development in
Research Triangle Park, a
science park in
Raleigh, North Carolina. The purpose of this initiative was to split research and development from pure manufacturing, thereby mirroring the split between Kumla and Lund in Sweden. The activity in Ericsson GE Mobile Communications was characterized by severe cooperation problems between the two companies, and inability to break into the U.S. market for mobile phones. At the end of 1993 General Electric left the board for the joint venture. Eventually, on April 1, 1998, General Electric used a bail-out sell clause in the contract with Ericsson and sold the remaining 20% of the joint venture back to Ericsson, who thereby became the sole owner of the company. NMT mobile phone GSM mobile phone In 1994 mobile telephony made up 85% of the activities in the Ericsson business unit for Radio Systems and this business unit increased its billing for activities including systems (
base stations) and terminals (handsets) with 73%. Mobile telephony was now regarded a core product, Growth and volumes in ECS increased rapidly and during the early years all focus was on quickly ramping up production, which was met with success. In 1998 the company generated a profit of 13 billion SEK. However, in 1999 the company already encountered problems in the consumer market, when their main competitor
Nokia started to use design as a weapon to gain market share.
Nokia 3210 has been described as an especially troublesome product, as it lacked an external
antenna. Ericsson viewed this as a technically inferior design, but consumers chose this design direction anyway. At the same time, Nokia started to compete by
economies of scale and could thus bring down the price on components.
The telecom crisis During 1998 the company ran into problems in the completion of their next flagship phone model,
Ericsson T28. It was initially planned for introduction in time for the
Christmas season of 1998, but the launch was delayed until the autumn of 1999. In March 2000 the
Philips factory for radio electronics in
Albuquerque, New Mexico was hit by lightning and caught fire, which hit the ECS supply chain very hard, and caused further delays in deliveries. The volume loss has been estimated at 7 million phones. Nokia was able to sign up secondary suppliers before Ericsson and could thus maintain their market lead. According to a study in 2000, Ericsson was the third largest mobile phone vendor with an 11% market share, trailing
Nokia and
Motorola. In 2000 ECS produced its first
smartphone,
Ericsson R380. It did not meet with commercial success, but was the first phone to use the
Symbian operating system, previously known as
EPOC. The company also produced a
Handheld PC named
Ericsson MC218, an
OEM-product based on
Psion Series 5mx. At this time various experimental projects involving handheld PCs was running: in the annual report of 1999 is a picture of a handheld PC named
HS210 cordless display phone which would use
Bluetooth to connect to a small base station in a household, and another experimental product was the
DelphiPad which was developed in cooperation with the Centre for Wireless Communications in
Singapore, a
tablet computer with touch-sensitive screen,
Netscape Navigator as
web browser and
Linux as its
operating system. These products were never finalized, but pictures of these prototypes have circled the web. Immediately after the turn of the century 2000–2001 the European telecom crisis occurred, and hit Ericsson Mobile Communications especially hard. The business unit containing ECS would now come to generate a loss of 24 billion SEK. The research- and development office in Lund was not subject to any major layoffs: 100 people were laid off and some 80 people in facility management and IS/IT were outsourced. A few months later however, the huge transformation occurred, splitting the company in two.
The split in Sony Ericsson and Ericsson Mobile Platforms As a last countermeasure to counter the economic crisis, Ericsson had to seek a partner for the handset production, and therefore the company was split in two parts on 1 October 2001: • Production and design of
mobile phones was transferred to
Sony Ericsson Mobile Communications in a joint venture with
Sony. Sony Ericsson at this time had some 3,500 employees. •
Mobile platforms, i.e. software and hardware used as a foundation for building mobile phones, were transferred to a new company called
Ericsson Mobile Platforms (EMP). Some of the customers of this company was to be HTC, LG, NEC, Sagem, Sharp and of course Sony Ericsson. The main focus in this company would become to produce a mobile platform for third generation mobile telephony,
UMTS. On 12 February 2009, Ericsson issued a press release stating that
Ericsson Mobile Platforms would be joined with
STMicroelectronics mobile platform company
ST-NXP Wireless, forming the new joint venture
ST-Ericsson, owned 50/50 by Ericsson and STMicroelectronics. In February 2012, Sony communicated that they closed the purchase of Ericsson's part of Sony Ericsson, which was consequently renamed
Sony Mobile Communications. At this time the company had roughly 8,000 employees globally. ==Products and platforms==