Ericsson Continues to Gain Market Share

Ericsson shares rose early Tuesday after Chief Executive Carl-Henric Svanberg said the company continues to gain market share and to outperform the competition.

"We will continue to drive profitability growth and gain further market share. We are in a good market position and we continue to gain market share and outperform the competition," Svanberg said at a strategy day for investors and analysts.

Svanberg said Ericsson was benefitting from integration issues at rivals Alcatel-Lucent and Nokia Siemens Networks, a joint venture between Nokia and Siemens.

Ericsson has well over 40% market share in the GSM/WCDMA third-generation wireless technology sector, Svanberg said, while he said new reports from analysts say it may be as much as 45%.

At 0940 GMT, Ericsson shares were up 3%, or SEK0.74, at 25.22.

Commenting on the strategy presentation, Enskilda Bank said there was little new in the presentation, describing it as largely a reiteration of previous comments. But given that Ericsson has been under pressure recently, analysts said, management's confident tone could account for the share strength.

Ericsson's scale and operational excellence plans would help it continue to grow, Svanberg said.

"We can live with fairly limited cost advantage that the Chinese (manufacturers) have, but not if they work smarter than us. This is why we're working with operational excellence," Svanberg said.

Cash-flow conversion is also expected to improve slightly in 2007, as the company improved how it managed large infrastructure projects in Asia and the Middle East, chief financial officer Karl-Hendrik Sundstrom said.

Ericsson, the world's largest wireless infrastructure company by revenue, earlier reaffirmed it expects the GSM and WCDMA market to show mid-single-digit growth in 2007.

It also earlier said, in material prepared ahead of the strategy day, that it expects the professional services market to continue to show good growth.

Sony Ericsson's outgoing President Miles Flint also told Dow Jones Newswires that he expects the global mobile phone market to reach 1.1 billion handsets by the end of 2007.

Sony Ericsson is a joint venture between Ericsson and Sony Corp. (SNE)