Bloomberg News

Ericsson Says China Smartphone Users Will Drive Growth

April 03, 2012

Ericsson AB (ERICB) said the increasing number of smartphone users in China will help support demand for phone equipment in the world’s biggest telecommunications market, countering a weaker pace of economic expansion.

“There is good room for growth” in China, Leif Johansson, chairman at Ericsson, said in a Bloomberg Television interview from the Boao Forum for Asia in southern China’s Hainan province today. “Here in Asia, we have slowing growth, but still very attractive growth rates. We are talking about seven to eight percent here in China, and that is not anything to be negative about.”

Ericsson, the world’s biggest maker of wireless network equipment, is seeking orders to supply customers including China Mobile Ltd. (941) to help bolster sales, after setting a lower growth target last month. Smartphone shipments in China will increase 52 percent to 137 million units this year, according to research company IDC, increasing consumers’ access to services such as video downloads, which require faster mobile-phone networks.

“Growth of smartphones in China can develop much more than it already has,” Johansson said. “My sense from meeting with customers here, there is an underlying demand for traffic network, especially in this country.”

Ericsson, based in Stockholm, last month set a target of 2 percent to 8 percent annual sales growth through 2014 compared with 2011. Last year’s target was 4 percent to 10 percent growth through 2013.

“We hope the worst is behind us in the U.S. and western Europe,” Johansson said. Ericsson is expecting a “steady improvement” in the U.S. economy, and a “more stable situation” in Europe, he said.

To contact Bloomberg News staff for this story: Mark Lee in Hong Kong at wlee37@bloomberg.net; Stephen Engle in Beijing at sengle1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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