Nokia and Ericsson are in Talks for a Merger

Nokia feature image e1583131802686
Nokia feature image e1583131802686

Ericsson is a name we haven’t seen in the smartphone market for quite a while now. Back in 2010, the company’s joint venture with Sony to produce Sony Ericsson phones was when we last saw them. However, we might soon be seeing the Swedish phone maker again as Nokia is looking to merge with them to compete with the likes of Huawei.

Nokia has put together a team of advisors to devise an optimal solution against struggling profits due to the pressure from its competition. Reports have revealed that the company is looking to either sell some of its assets or merge with either Ericcson or Cisco to strengthen its foothold in networking to survive in the growing era of 5G.

Cisco has already ruled itself out but Ericcson still remains a likely candidate for a merger. Nokia is also considering other options including shifting investments or adjusting its balance sheet. Although the merger is only an option, it may make it easier for Nokia to compete against Huawei and Samsung in the 5G hardware sector.

The company says that obtaining equipment, software, and services from a single vendor will reduce the cost of ownership by 20% and will also reduce the time to market by 30% compared to a multi-vendor strategy.

They are investing heavily in 5G in order to catch up with the competition and are also making changes to the management to bring in more networking expertise. Regardless, the company doesn’t expect to make a major recovery in profit until 2021.

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