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'Good times for mobile companies are back,' Ericsson whispers

Growth ahead for the Swedes but job cuts march on
Written by Jo Best, Contributor

Growth ahead for the Swedes but job cuts march on

The mobile market will emerge from the doldrums this year - that's the word from a man who knows; Carl-Henric Svanberg, Ericsson's CEO.

Announcing the mobile company's results for the fourth quarter of 2003, Svanberg said that that the bad times dogging the market could become a thing of the past in 2004. Speaking at the announcement of the results, Svanberg said: "We believe the market has stabilised and our view is that the global mobile systems market in 2004... will be in line with or show light growth compared to 2003."

And if anyone knows about bad times, it's Ericsson. The past few years have seen the company shedding thousands of jobs in an effort to achieve profitability. While the CEO believes the manufacturer has made a "successful turnaround", he said that he hadn't forgotten the employees who had left, adding "there's no joy in that."

Ericsson's struggle to put its account book in the black has been a long and painful one. Since 2000, the company's 100,000-strong workforce has almost halved. While Svanberg said the "restructuring is coming to an end", he acknowledged that there were still thousands of jobs "on the way out" before cuts will come to an end.

Ericsson's Q4 results will no doubt help to keep the hankies at bay. The company has announced its first profit before restructuring charges for several quarters of about £410m, for the three months ended December 2003.

Analysts have recently backed up the talk of an upturn. Both Gartner and IDC have recently highlighted the way in which they expect handset shipments to increase in the coming year - the former betting on a 20 per cent rise during 2003 with 560 units shifted in 2004, and the latter fancying a 23.3 per cent gain for last year.

Despite the promising figures, Svanberg remained cautious about the coming months, saying the company had a "somewhat more optimistic view on the market place". Ericsson is "also noting that we will see a good quarter in the next quarter - don't misread [it]... some growth [during the quarter] will be pick-ups or catch-ups of investment

He added that the Swedish phone giant won't be taking its eye off the ball following its fourth-quarter upturn. "It's not a rainy day that goes by and it's sunshine again," he said.

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