Telefonaktiebolaget LM Ericsson (publ) (ERIC): History, Ownership, Mission, How It Works & Makes Money

Ever wondered about the powerhouse behind global connectivity, Telefonaktiebolaget LM Ericsson (publ)? Founded in 1876, this Swedish multinational has evolved into a key player in the telecommunications industry, employing around 100,000 people across more than 180 countries. From its pioneering contributions to 2G, 3G, 4G, and 5G technologies to its current focus on cutting-edge network solutions, how exactly does Ericsson operate and generate revenue in today's dynamic market? Keep reading to discover the fascinating history, ownership structure, and business model that drive this influential company.

Telefonaktiebolaget LM Ericsson (publ) (ERIC) History

Telefonaktiebolaget LM Ericsson (publ) (ERIC)'s Founding Timeline

Year established

The company was established in 1876.

Original location

The company was originally located in Stockholm, Sweden.

Founding team members

The company was founded by Lars Magnus Ericsson.

Initial capital/funding

Details on the specific initial capital or funding for the company's establishment are not readily available in the provided context. However, Lars Magnus Ericsson started his business in a small workshop.

Telefonaktiebolaget LM Ericsson (publ) (ERIC)'s Evolution Milestones

Telefonaktiebolaget LM Ericsson (publ) (ERIC)'s Transformative Moments

• Early Internationalization: Ericsson's early expansion into international markets, particularly in Europe and Russia, was a transformative decision. This move allowed the company to grow beyond the limited Swedish market and establish itself as a global player in the telecommunications industry.
• Adoption of Automatic Switching: The shift to automatic switching technology in the 1920s was a critical step. It enabled Ericsson to offer more advanced and efficient telephone solutions, which were essential for meeting the growing demands of telephone networks.
• Investment in Mobile Technology: Ericsson's early investments in mobile technology, starting in the 1960s and 1970s, were pivotal. These investments positioned the company to be a leader in the mobile revolution, particularly with the development and deployment of GSM.
• Strategic Partnerships and Acquisitions: Throughout its history, Ericsson has engaged in strategic partnerships and acquisitions to enhance its technological capabilities and market presence. These collaborations have been crucial for staying competitive and driving innovation.
• Focus on Research and Development: Ericsson has consistently invested heavily in research and development, which has been essential for its ability to innovate and stay ahead of the curve in the fast-evolving telecommunications industry. This commitment to innovation has allowed Ericsson to play a key role in the development of new technologies like 5G.

Explore more about the investors of the company here: Exploring Telefonaktiebolaget LM Ericsson (publ) (ERIC) Investor Profile: Who’s Buying and Why?

Telefonaktiebolaget LM Ericsson (publ) (ERIC) Ownership Structure

Telefonaktiebolaget LM Ericsson is a public company, meaning its shares are traded on stock exchanges, and ownership is distributed among numerous shareholders.

Telefonaktiebolaget LM Ericsson (publ) (ERIC) Current Status

As a public company, Telefonaktiebolaget LM Ericsson (publ) is listed on the Nasdaq Stockholm and Nasdaq New York stock exchanges. This allows individuals and institutions to buy and sell shares, contributing to the company's capital and influencing its market valuation. Being publicly traded brings both opportunities and responsibilities, including increased transparency and regulatory compliance.

Telefonaktiebolaget LM Ericsson (publ) (ERIC) Ownership Breakdown

The ownership of Telefonaktiebolaget LM Ericsson (publ) is distributed among a mix of institutional and individual investors. While specific ownership percentages can fluctuate due to trading activity, major shareholders are typically institutional investors. Here's a general overview:

Telefonaktiebolaget LM Ericsson (publ) (ERIC) Leadership

The leadership team of Telefonaktiebolaget LM Ericsson (publ) is responsible for the strategic direction and operational management of the company. As of April 2025, key figures include:

• Börje Ekholm: President and CEO
• Carl Mellander: Chief Financial Officer

These individuals, along with the executive team and board of directors, play a crucial role in guiding Ericsson's strategy, overseeing its operations, and ensuring its long-term success. You might also be interested in: Mission Statement, Vision, & Core Values of Telefonaktiebolaget LM Ericsson (publ) (ERIC).

Telefonaktiebolaget LM Ericsson (publ) (ERIC) Mission and Values

The company's mission is to empower an intelligent, sustainable, and connected world, while its core values include respect, professionalism, perseverance, and innovation.

[Company's] Core Purpose

Official mission statement

Ericsson's mission statement is: 'To create technology that connects. We are committed to innovation and excellence, constantly pushing the boundaries of what is possible. We enable our customers to succeed and create sustainable value for all stakeholders.'

• Driving innovation in mobile and fixed networks.
• Providing services in telecom management.
• Crafting emerging business and technology.

Vision statement

The vision statement is: 'To create a world where limitless connectivity improves lives, redefines business and pioneers a sustainable future.'

• Leading in 5G and future technologies.
• Spearheading digital transformation.
• Building a connected future for businesses and societies.

Company slogan/tagline

Ericsson's current tagline is 'Imagine Possible.'

The slogan reflects the company's commitment to:

• Inspiring creativity and innovation.
• Highlighting the transformative power of connectivity.
• Focusing on future possibilities through technology.

To gain more insights into the company's investors, check out: Exploring Telefonaktiebolaget LM Ericsson (publ) (ERIC) Investor Profile: Who’s Buying and Why?

Telefonaktiebolaget LM Ericsson (publ) (ERIC) How It Works

Telefonaktiebolaget LM Ericsson (publ), commonly known as Ericsson, operates by developing and delivering telecommunications equipment, software, and services, enabling communication service providers and enterprises to offer connectivity solutions.

Ericsson's Product/Service Portfolio

Ericsson's Operational Framework

Ericsson's operational framework revolves around several key processes:

• Research and Development: Ericsson invests heavily in R&D to stay at the forefront of telecommunications technology. In 2024, Ericsson's R&D expenses totaled approximately 43.7 billion SEK.
• Supply Chain Management: The company manages a global supply chain to manufacture and deliver its products. This involves sourcing components, manufacturing equipment, and distributing it worldwide.
• Sales and Marketing: Ericsson employs a direct sales force and partners to market and sell its products and services to communication service providers and enterprises.
• Project Management and Service Delivery: For managed services and network deployments, Ericsson uses project management methodologies to ensure timely and efficient delivery.
• Customer Support: Providing ongoing support and maintenance services to customers is a critical part of Ericsson's operations, ensuring network reliability and performance.

Ericsson's Strategic Advantages

Ericsson's success in the telecommunications market is underpinned by several strategic advantages:

• Technology Leadership: Ericsson holds a significant number of patents in 5G and previous generations, giving it a competitive edge in technology innovation.
• Global Presence: With operations in over 180 countries, Ericsson has a strong global footprint, allowing it to serve customers worldwide.
• Strong Customer Relationships: Ericsson has long-standing relationships with many of the world's largest communication service providers.
• Comprehensive Portfolio: Ericsson offers a wide range of products and services, from infrastructure to software and services, providing integrated solutions to its customers.
• Focus on Sustainability: Ericsson emphasizes sustainability in its operations and product development, appealing to environmentally conscious customers and investors.

For more insights into Ericsson's core values, explore: Mission Statement, Vision, & Core Values of Telefonaktiebolaget LM Ericsson (publ) (ERIC).

Telefonaktiebolaget LM Ericsson (publ) (ERIC) How It Makes Money

Telefonaktiebolaget LM Ericsson (publ), commonly known as Ericsson, primarily generates revenue by selling and deploying network infrastructure, providing related services, and licensing its technology, mainly focused on mobile network technology.

Ericsson's Revenue Breakdown

Here's a look at Ericsson's revenue streams:

Ericsson's Business Economics

Ericsson operates within the telecommunications equipment and services market, where 5G technology is a significant driver. The company's business economics are influenced by several factors:

• Pricing Strategies: Ericsson employs competitive pricing, often offering bundled solutions that include equipment, software, and services. Their pricing is also influenced by the scale of deployment and the specific needs of telecom operators.
• Economic Fundamentals: The demand for faster and more reliable mobile networks, driven by increasing data consumption and the expansion of IoT (Internet of Things), underpins Ericsson's business. Economic cycles and the investment capacity of telecom operators also play a crucial role.
• Market Position: As a key player in the 5G market, Ericsson benefits from its technological expertise and global presence. However, the company faces competition from other major network equipment vendors.

Ericsson's Financial Performance

Ericsson's financial performance can be assessed through the following points:

• Revenue: Ericsson reported net sales of SEK 271.5 billion for the full year 2024.
• Gross Margin: The gross margin for 2024 was 42.7%, reflecting the profitability of its sales after accounting for the cost of goods and services.
• Operating Income: Ericsson's operating income for 2024 was SEK 19.4 billion.
• Net Income: The net income for 2024 was reported at SEK 13.3 billion.
• Cash Flow: In 2024, Ericsson's cash flow from operating activities was SEK 23.2 billion, showcasing its ability to generate cash from its core operations.

For more insights into Ericsson's values, take a look at Mission Statement, Vision, & Core Values of Telefonaktiebolaget LM Ericsson (publ) (ERIC).

Telefonaktiebolaget LM Ericsson (publ) (ERIC) Market Position & Future Outlook

Telefonaktiebolaget LM Ericsson (publ) (ERIC) is a major player in the telecommunications industry, facing both opportunities for growth and potential challenges that could impact its future performance. Ericsson is strategically positioned to capitalize on the expanding 5G market and related technological advancements. For an in-depth look at the company's financial standing, see: Breaking Down Telefonaktiebolaget LM Ericsson (publ) (ERIC) Financial Health: Key Insights for Investors

Competitive Landscape

Opportunities & Challenges

Industry Position

Ericsson holds a strong position in the telecommunications industry, particularly in the 5G infrastructure market. The company's key strengths include:

• Leading provider of 5G network equipment and solutions.
• Extensive global presence and partnerships with major telecom operators.
• Strong focus on research and development, driving innovation in network technologies.