Top

Ericsson, Nokia, Samsung Witness 2023 Revenue Slump to Mark 5G Era’s First Record Low Year

  • Ericsson, Nokia and Samsung reported a slump in 2023 revenue after hitting a peak in 2022.
  • Operators worldwide have been judicious in their spending and inventory management.
  • Uncertainty remains as the industry shows no immediate signs of revival in 2024.

Ericsson, Nokia and Samsung each announced a drop in overall 2023 sales in their earnings calls, citing macroeconomic challenges and a shrinking mobile network infrastructure market, as well as lower spending by operators, particularly in North America.

India was a silver lining for the Nordic vendors, as the unprecedentedly quick rollouts boosted their overall numbers. However, there was a slowdown among Indian operators during Q4 2023, as they plan to normalize their investments in 2024 following a capex-intensive 2023.

In 2023, suppliers made significant strategic decisions to reduce losses caused by external factors and transfer attention back to their core capabilities and cash-generating business sectors.

For the year 2023, Ericsson generated nearly $24.8 billion in revenue while its Finnish counterpart Nokia generated $24.1 billion in revenue. Samsung’s network division sales stood at $2.9 billion. Due to the changes in the business mix, its margin remained deflated.

Ericsson

  • Early adopters of 5G technology saw decreased sales, leading to a reported decline in revenue for Ericsson. MNOs in these areas continued to digest inventory and remained cautious with their spending.
  • Ericsson maintained its leadership in 5G Standalone deployments. Meanwhile, its cloud and network services business revenue remained unchanged YoY as the increase was offset in part by the decreased managed service revenues because of descoping and contract exits.

Enterprise Wireless Solutions (Cradlepoint) and the newly acquired Global Communication Platform Vonage helped drive growth in the enterprise category. Ericsson’s expansion into Enterprises will continue as it has made investments toward the development of the Global Networks Platform for Network APIs, which is viewed as a critical component in opening new revenue streams for customers.

Two charts showing Ericsson's Revenue by Segment & Region, 2022 vs 2023

Nokia

  • Nokia’s Mobile Network business had aimed for a resilient performance in 2023, despite the uncertain and challenging conditions in the worldwide RAN market. By the end of 2023, gross margin had improved significantly due to a shift in product mix towards software.
  • Nokia’s Cloud and Network Services business’ net sales were flat for the year but operating profit and margin improved due to digital asset sales and hedging. Nokia ranked second behind Ericsson in terms of the number of 5G Standalone core deployments.
  • The Network Infrastructure segment too saw revenue declines due to macroeconomic uncertainty and client inventory digestion. There was an increase in order intake in Q4 2023, which will be critical going into 2024. The performance of fixed, IP, and submarine networks deteriorated in 2023, while optical networks experienced small single-digit gains. Nokia anticipates some relief in H2 2024.
  • In 2023, revenue from enterprise customers increased by about 15% to $2.46 billion, with 151 new clients joining. Momentum in private networks continued with Nokia catering to more than 710 private wireless clients.

Two charts showing Nokia's Revenue by Segment & Region, 2022 vs 2023

Samsung

  • In 2023, the South Korean technological leader reported $2.9 billion in revenue, down from $4.2 billion a year ago.
  • Samsung saw similar consequences as its Nordic peers, but it remains optimistic about landing key deals for vRAN and Open RAN networks in 2024. Samsung has been a big player in this area with a few greenfield and brownfield deployments in North America and Japan.

Key Takeaways

2023 was a challenging year for network equipment makers. Operators around the world are exercising extreme prudence and judiciousness when it comes to network expenditure.

The industry also saw a big event at the end of the year, with Ericsson signing a $14 billion deal with AT&T to become the provider of its Open RAN-compliant equipment, effectively reducing Nokia’s market share in the NAM region.

Suppliers are certain that demand will rise and market spending will stabilize as a result of capacity requirements, emerging use-cases, more data traffic, and the integration of more mid-band radios, but the timeline remains uncertain.

Operators and manufacturers are also putting a lot of effort toward enabling 5G Standalone, incorporating Open architecture into their network infrastructure, and monetizing 5G services. Tier-1 MNOs in several countries have risen to prominence as 5G FWA has grown in popularity, but they are yet to capitalize on URLLC or mMTC use cases.

Another significant aspect that has been identified as critical in effectively monetizing 5G networks is the ability to provide users with premium access while also improving their experience through network slicing and enhanced UE Route Selection Policy. However, these are actionable items for the future that will provide results in the long run.

The short-term gains will come from efficient cost reductions and relevant automation that can standardize operations to make them more efficient, continued investments in and divestitures from core competencies, and attempts to capture any new emerging markets that may open as a result of geopolitical sanctions on Chinese vendors.

On the other hand, operators will undoubtedly play a critical role in recovering the RAN market. However, these operators currently show no signs of an early revival in their market forecasts as they wait for the ecosystem to further develop before deploying their infrastructure.

Related Posts

Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

Apple Snack Pack

PREMIUM

Understanding iPhone

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited

Registration

In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.