Ericsson to Enhance Presence in Silicon Valley - Analyst Blog

Ericsson ERIC recently unveiled its plans to construct a new campus in Santa Clara, CA. This new campus will comprise approximately 400,000 square feet of operational space spanned across two buildings and an advanced Ericsson Experience Center. Further, the campus is expected to house about 2,000 employees devoted to research and development in IP, TV and Media, SDN, NFV and mobile innovation. Construction of the campus has already begun and is expected to be available for Phase One occupancy by the third quarter of 2015. However, the financial details pertaining to the construction have not been revealed.

Since 2009, Silicon Valley has been the hub of development for Ericsson's IP solutions. Further, it has formed strong partnerships to deliver innovative network-based experiences through the latest Software Defined Network (SDN), Network Functions Virtualization (NFV) and radio technologies. In addition, Silicon Valley is also a center for Ericsson's innovation in TV and Media. Being the leader in the convergence of IP, TV and Media, Ericsson is favorably positioned to develop the technologies that will transform television and video entertainment experiences.  Therefore, this new campus in the valley will aid the accelerated process of innovation in the area.

Of late, video traffic has been witnessing a strong momentum in mobile networks and Ericsson is addressing the need of both broadcasters and telecom operators through its technology expertise and services capabilities. According to the Ericsson Mobility Report June 2013, video is the biggest contributor to mobile network traffic and this is expected to grow 60% annually till 2018-end.

Over the last six years, Ericsson has invested about $7 billion in acquisitions in the U.S., including the takeover of Microsoft's Mediaroom TV platforms and services division in Sep 2013.

Ericsson's strategy to expand in the Silicon Valley is aligned with the rich talent available in the region, as the company is always in need of technology savvy engineers who can partner, create, learn, sustain and innovate for the company.

Ericsson currently has a Zacks #4 (Sell). Some better-ranked wireless equipment stocks worth a look are Ubiquitous Networks Inc. UBNT, Polycom, Inc. PLCM and ShoreTel, Inc. SHOR. Polycom and ShoreTel have a Zacks Rank #1 (Strong Buy) while Ubiquiti has a Zacks Rank #2 (Buy).

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