Understanding the Major Partnerships in Communication Equipment
Introducing the Hardware and Communications Equipment Industry
Cisco partners with Ericsson
In 2015, Cisco Systems (CSCO) and Ericsson (ERIC)—both leading players in the communication equipment segment—announced a strategic partnership that could help both companies realize synergies of $1 billion by 2018. Both companies have faced demand challenges in the smartphone market, and both are eager to provide better networking solutions by leveraging capability in their respective fields. This initiative is aimed at the rising competition from Nokia (NOK) and China’s (FXI) Huawei.
Ericsson believes Cisco’s expertise in IP (intellectual property) and the enterprise space will complement Ericsson’s expertise in mobile networks. This collaboration will thus focus on service providers and then move to the enterprise space, where it will accelerate the adoption of IoT (Internet of Things) services across sectors.
Cisco, Intel, and Ericsson plan to collaborate
In February 2016, Cisco announced that it would collaborate with Ericsson and Intel (INTC) to develop the industry’s first 5G (fifth generation) router. As members of the Verizon 5G Technology Forum, Cisco, Intel, and Ericsson will partner with Verizon (VZ) to accelerate the pace of critical 5G innovations.
The 5G router will enable businesses and residential customers to achieve faster networking speeds, lower latency, and the ability to handle more Internet-connected devices.
Tech heavyweights
The collaboration between these technology heavyweights should help enable a secure, ultra-high-speed wireless bandwidth by combining Cisco’s networking innovations, Ericsson’s advanced 5G mobile networking technology, and Intel’s next-generation 5G silicon. This collaboration will also advance the next-generation strategic partnership between Ericsson and Cisco that was announced in November 2015. These two companies plan to work together to create the networks of the future.
Cisco projects a surge in the number of mobile users, smart devices, and machine-to-machine connections in the next few years. As shown in the above chart, the number of global mobile users is projected to rise to 5.5 billion in 2020 from 4.8 billion in 2015. Mobile-ready devices and connections are expected to rise to 11.6 billion from 7.6 billion, respectively, in the same period.
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