After the transaction is completed, Ericsson will add approximately 4,000 highly skilled professionals in the R&D, production and sales fields in more than 20 countries including Germany, Romania, Mexico, and China. As we all know, on the road of transformation, this century-old store has long chosen to do subtraction so that it can pack lightly and adopt a strategy of focusing more on the operator market; but in the new round of competition for the big T market, especially the 5G market, Ericsson chose to do addition this time, which is worthy of the industry's thinking.
So why did Kathlin choose to sell the antenna and filter business? Why did Ericsson choose to acquire the asset at this time? What is the impact of this acquisition on the industrial chain, especially domestic related companies? Has the vertical integration of the industry chain in the future 5G era become the "only way"?
Antenna technology shuffle, Kathlin reluctantly cut love
Before getting involved with the century-old equipment giant this time, there were very few reports on the industry's manufacturers in this subdivision of Kathlin.
It is understood that Kathlin is headquartered in Rosenheim, Germany. It was founded in 1919 and is also a century-old store. It is a world-leading provider of antenna and filter technology and an existing antenna supplier of Ericsson.
In 2013 and before, Kathlin occupied the first echelon of global base station antennas for a long time. However, with the network's evolution to 4G, especially the rapid scale deployment of the domestic 4G market, the influence of China's communication equipment industry continues to increase, and Kathlin's market share It has declined, but still has a certain degree of competitiveness in high-end products, has extensive experience in antenna design and research, and has a strong intellectual property and patent portfolio.
According to the statistics of market research organization EJL Wireless Research, in 2017, Kathlin's global macro station antenna shipments accounted for 5% (ranking seventh) and revenue accounted for 7% (ranking third).
Nowadays, in addition to facing fierce competition pressure from Chinese manufacturers, like all independent antenna feed system manufacturers, Kathlin is also facing the shuffling challenges brought about by technological changes in the 5G era.
The large bandwidth and low latency of 5G all pose new challenges to traditional antenna systems. From the perspective of 5G networks, the key to achieving high-speed and intelligent scheduling is mainly to rely on 5G key technologies such as high-frequency millimeter waves and beamforming. Therefore, 5G antennas must be multi-band, wide-band, multi-beam, intelligent, and miniaturized. , Customization, and development from passive antennas to active antennas.
It can be said that in the 5G era, Kathlin faced both opportunities and challenges, and this company chose to reluctantly give up.
Signs of vertical integration, Ericsson acquires Kathlin to enhance the overall competitiveness of 5G
As mentioned in the previous article, the upgrade of antennas to multi-frequency and multi-standards in the 5G era has become a general trend; at the same time, the trend of using wireless signal and antenna system integration to optimize site space is becoming more and more obvious.
In addition, with the arrival of more powerful 5G networks, this will further affect the development of antenna technology, especially Massive The importance of antennas in MIMO scenarios has increased significantly, such as Massive The number of channels of MIMO antennas is getting higher and higher, and the higher complexity also requires the use of innovative active antenna forms to achieve, which has a significant impact on the performance, capacity, and coverage of the network system.
Fredrik, Executive Vice President and Head of Network Business Unit, Ericsson Jejdling said: “Strengthening internal antenna capabilities is another important step in Ericsson’s network portfolio strategy. The acquisition of Kathlin’s antenna and filter business will further expand Ericsson’s capabilities and competitiveness in the field of active and passive antennas. With Kay As Shihlin professionals further innovate in the antenna and filter business, we will expand our product range and further optimize the site space, which is essential for the introduction of 5G."
The acquisition of Kathlin will not only further enhance Ericsson's internal antenna capabilities, but will also enhance the overall competitiveness of 5G equipment. In fact, it is not uncommon for equipment vendors in the industry to improve their internal antenna capabilities. For example, the close cooperation between Huawei Antenna and Huawei Wireless has greatly enhanced its competitiveness, as well as the in-depth cooperation between ZTE and Mobi, and the in-depth cooperation between Nokia and RFS.
It is not difficult to see that with the fiercer competition in the 5G era, the requirements for end-to-end capabilities of manufacturers are getting higher and higher, and the vertical integration of the industry chain may become a major trend.
Industrial impact, traditional antenna manufacturing companies may be impacted
Public information shows that Ericsson's acquisition of Kathlin's antenna and filter division is expected to be completed in the third quarter of this year. Excluding the sales to Ericsson, Kathlin’s antenna and filter division had sales of approximately 270 million euros last year. However, the two companies have agreed not to disclose the purchase price to the public.
After the completion of this acquisition, Ericsson’s internal antenna/filter design and manufacturing capabilities will undoubtedly be further enhanced, and it may also affect the original antenna supplier pattern, but this depends on the choice of Ericsson’s next strategy:
If the R&D team is retained internally, most of the production/small part of the design is outsourced, and the impact on existing suppliers is limited. If most of them are converted to internal production and self-produced and sold, it will have a greater impact on existing suppliers. The main impact may be domestic traditional antenna manufacturing companies such as Tongyu Communications, Jingxin Communications, and Shenglu Communications.