Ericsson bails on its IoT business
Despite years of forecasting huge growth in the Internet of Things, European communication technology giant Ericsson is getting rid of its cellular IoT business.
It will transfer its IoT Accelerator and Connected Vehicle Cloud businesses and related assets to US company Aeris Communications.
The deal is expected to close in Q1 of 2023 and will hit Ericsson’s results by SEK 1.1 billion (€100m) in Q4. However it will eliminate substantial quarterly losses of E25m in the Business Area Technologies and New Businesses part of the business.
- IoT market to see double digit growth
- 5G users hit 1bn in 2022
- Ericsson in $1.1bn IoT Cradelpoint buy
“Despite significant investments to address the fragmentation of the IoT market, Ericsson has only tapped into a limited part of the value chain, limiting the returns of such investments,” said Åsa Tamsons, Head of Business Area Technologies & New Businesses at Ericsson.
The IoT Accelerator business is substantial, used by over 9,000 enterprises to manage more than 95 million connected devices with 22 million eSIM connections globally. These connect through over 35 cellular network service providers. Ericsson has spend billions on the business, including buying Cradlepoint in 2020 to boost the software side.
The other part of the business being transferred to Aeris is the Connected Vehicle Cloud, which Ericsson says is the most complete connected car platform on the market today. Car makers are using it to connect six million vehicles in 180 countries.
Aeris
Aeris was founded in 1996 as a cellular connectivity specialist based on a software defined network architecture. This ‘Intelligent IoT Network’ targets industry verticals such as transportation, energy, automotive and healthcare, gives communications service providers the opportunity to monetize new services on top of connectivity enabled by the IoT Accelerator.
It works with operators including Softbank, AT&T, T-Mobile and Vodafone, and like Ericsson also works with car makers. However it has been more successful at making money out of the services.
“Aeris has been successful in extending its IoT solution offering beyond connectivity and has the right focus, assets, and capabilities to realize the full value creation potential of Ericsson’s IoT business and its strong market presence,” said Tamsons at Ericsson.
“The combined business will offer an unparalleled IoT platform for enterprises and new revenue streams for communication service providers, ultimately benefiting Ericsson’s customers. Aeris is a good home for our IoT business.”
The combination of the Aeris and Ericsson IoT platforms will connect over 100 million IoT devices worldwide, covering 190 countries and 9,400 companies. This consolidation will help to reduce the fragmentation in the cellular IoT industry, says Ericsson. This also follows Semtech’s deal to acquire Sierra Wireless for its cellular IoT hardware.
Marc Jones, President and CEO of Aeris, says: “Building the best technology to support the success of our customers and drive innovation in the IoT space have always been at the forefront for Aeris. Our intelligent, software defined IoT network and Ericsson’s leading connectivity management platform will provide the leading IoT technology stack in the industry.”
www.ericsson.com; www.aeris.com
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