The Economist – Hans free
Ericsson claims that close to half its sales come from services (though much comes from installing networks). It spends plenty on R&D. But its innovations have brought too few benefits. The firm’s shares have flatlined for most of a decade. Bengt Nordstrom, an analyst at Northstream, a telecoms consulting firm, blames cautious leadership by what he calls “general practitioner” bosses. Ericsson should now pick a leader more inspired by technical or digital matters, and thus better placed to meet competition from Google and other new rivals. The challenge for Mr Vestberg’s successor is not only to cut costs, but to find a new purpose. If Ericsson cannot, worries Mr Nordstrom, the company’s continued existence could soon come into question.