Ericsson discontinues development of modems - shifts part of investment into radio networks

  * Executes on growth strategy by redirecting investment from modems to radio
    networks - shifting parts of resources from Modems to radio network R&D,
    including small cells
  * Discontinues development of LTE thin modems with the intent to reduce or
    redeploy workforce. Now entering into local co-determination negotiations
    with employee representatives to determine next steps
  * Will deliver commercially available Ericsson M7450 modem as planned
  * With current visibility today's announcement will lead to a significant
    reduction in costs related to the modem business in the first half of 2015
    and Modems will have no impact on Group P&L from the second half of 2015
Ericsson (NASDAQ:ERIC) today announced it will discontinue future development of
modems and shift parts of resources in modems to radio network R&D to better
capture growth opportunities in this area. The change in strategy for modems
comes as the company completes its previously communicated evaluation of the
future of the modems business.

In order to capture opportunities in radio networks, especially within small
cells, energy efficiency and M2M, Ericsson has an immediate need to increase its
R&D resources by approximately 500 people. Parts of the Modems organization have
a relevant R&D competence base to support this growth.

Ericsson took over the LTE thin modem operations as part of the breakup of the
joint venture with STMicroelectronics in August 2013. Since then, the modem
organization has focused on bringing the first devices integrating an Ericsson
modem on the market. This was achieved in August 2014 with M7450 which Ericsson
continues to deliver to its customers.

Since integration, the modems market has developed in a direction that has
reduced the addressable market for thin modems. In addition, there is strong
competition, price erosion and an accelerating pace of technology innovation.
Success in this evolved market requires significant R&D investments. As a
consequence, Ericsson has decided to shift away from modem development to
increase focus on opportunities in radio networks.

This is in line with previously communicated statement to evaluate success of
Modems within 18-24 months of integration. As a result of the change in strategy
Ericsson intends to reduce or redeploy workforce. Local co-determination
negotiations with employee representatives to determine next steps will now
commence.

Hans Vestberg, President and CEO of Ericsson said: "We have concluded the first
phase of the modems strategy by successfully delivering the Ericsson M7450
modem. However, given the modem market dynamics and the development in small
cells and indoor coverage markets, we believe resource re-allocation is more
beneficial for the Ericsson Group and our customers overall."

The execution of the announced change in strategic direction will commence
during the fourth quarter 2014 and we still estimate the R&D cost for Modems to
amount to approximately SEK 2.6 b for the full year 2014. With current
visibility today's announcement will lead to a significant reduction in costs
related to the modem business in the first half of 2015 and Modems will have no
impact on Group P&L from the second half of 2015.

Segment Modems will continue to be reported separately until end 2014.

SEGMENT MODEMS

1,582 employees distributed across the following main sites: Sweden (689), India
(235), Germany (216), China (206), Finland (122).



NOTES TO EDITORS

CONFERENCE CALL FOR ANALYSTS, INVESTORS AND MEDIA

A conference call for financial analysts, investors and media will begin at
15:00 CET (14:00 UK time, 10:00 Eastern Daylight Time in the US, and 23:00 local
time in Japan). CEO Hans Vestberg and CFO Jan Frykhammar will comment on the
announcement and take questions.

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Confirmation number: 15379726

Please call in at least 15 minutes before the conference call begins.

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Ericsson is the driving force behind the Networked Society - a world leader in
communications technology and services. Our long-term relationships with every
major telecom operator in the world allow people, businesses and societies to
fulfill their potential and create a more sustainable future.

Our services, software and infrastructure - especially in mobility, broadband
and the cloud - are enabling the telecom industry and other sectors to do better
business, increase efficiency, improve the user experience and capture new
opportunities.

With more than 110,000 professionals and customers in 180 countries, we combine
global scale with technology and services leadership. We support networks that
connect more than 2.5 billion subscribers. Forty percent of the world's mobile
traffic is carried over Ericsson networks. And our investments in research and
development ensure that our solutions - and our customers - stay in front.

Founded in 1876, Ericsson has its headquarters in Stockholm, Sweden. Net sales
in 2013 were SEK 227.4 billion (USD 34.9 billion). Ericsson is listed on NASDAQ
OMX stock exchange in Stockholm and the NASDAQ in New York.

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FOR FURTHER INFORMATION, PLEASE CONTACT

Ericsson Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com

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Ericsson discloses the information provided herein pursuant to the Securities
Markets Act and/or the Financial Instruments Trading Act. The information was
submitted for publication on September 18, 2014 at 08:00 CET.


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