Ericsson sells its IoT business to Aeris
Ericsson and IoT solutions provider Aeris Communications have signed an agreement for the transfer of Ericsson’s IoT Accelerator and Connected Vehicle Cloud businesses.
Ericsson IoT Accelerator is used by over 9,000 enterprises to manage more than 95 million connected devices with 22 million eSIM connections globally. These enterprises and connections leverage Ericsson's ecosystem of over 35 communications service provider partners for global IoT cellular connectivity.
The IoT business, with 2022 full-year forecasted net sales of SEK 0.8 billion (USD 77.39 million), has been the key driver of the losses in Business Area Technologies and New Businesses in the Enterprise segment. The transaction will eliminate quarterly losses of SEK 0.25 billion (USD 24.18 million).
San Jose, California-based Aeris is an expert in the IoT field, providing businesses with intelligent IoT cellular connectivity. Its solution stack is being brought to the market through an ecosystem of channel partners, communications service providers and direct sales organizations. The company has already teamed up with big-name service providers including Softbank, AT&T, T-Mobile, and Vodafone, and is also working with automotive original equipment manufacturers.
Ericsson's Connected Vehicle Cloud is the most complete connected car platform on the market today, with frontrunners in automotive IoT using it to connect six million vehicles and counting across 180 countries. Together, Aeris’ and Ericsson’s IoT platforms will connect over 100 million IoT devices worldwide, covering 190 countries
“Aeris has been successful in extending its IoT solution offering beyond connectivity and has the right focus, assets, and capabilities to realize the full value creation potential of Ericsson’s IoT business and its strong market presence. Despite significant investments to address the fragmentation of the IoT market, Ericsson has only tapped into a limited part of the value chain, limiting the returns of such investments. The combined business will offer an unparalleled IoT platform for enterprises and new revenue streams for communication service providers, ultimately benefiting Ericsson’s customers. Aeris is a good home for our IoT business,” says Åsa Tamsons, Head of Business Area Technologies & New Businesses at Ericsson, in a press release.
With the cellular IoT market being a rather fragmented sector, a consolidation of two major players is expected to accelerate the IoT market overall. IoT will be a fundamental and growing part of the 4G and 5G market.
“Building the best technology to support the success of our customers and drive innovation in the IoT space have always been at the forefront for Aeris. Our intelligent, software defined IoT network and Ericsson’s leading connectivity management platform will provide the leading IoT technology stack in the industry. We look forward to bringing these new, transformational IoT solutions and Ericsson’s IoT Accelerator and Connected Vehicle Cloud products to our customers,” says Marc Jones, President and CEO of Aeris.
The transaction includes the transfer of Ericsson’s assets and employees in its IoT business to Aeris. In addition, Ericsson intends to support Aeris with transition services and will acquire a small stake in the company. The companies currently expect to close the transaction in the first quarter of 2023.