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Ericsson to Supply 5G-ready Core to Panasonic Avionics

ERIC HRS QCOM VOD

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Telefonaktiebolaget LM Ericsson (ERIC - Free Report) has been chosen by Panasonic Avionics Corporation, a leading supplier of inflight entertainment and communication systems, to provide 5G-ready core solutions. The technology will enable the next generation of connectivity services to the aviation industry and multiple other markets.

Panasonic Avionics will implement Ericsson’s 5G-ready core solution through its subsidiary AeroMobile, a global inflight connectivity provider and registered mobile network operator.

The contract is the first step of a long-term strategic collaboration between the two companies, which will focus on areas like 5G and the Internet of Things.

Ericsson’s 5G-ready core leverages on NFV and SDN technologies, thus offering ultra-scalability, programmability and automation to the networks. It is powered with real-time instantiation of network functions and network slicing, which facilitates network resource optimization, new business models and rapid service innovation.

Panasonic Avionics can apply the 5G-ready core across a wide and ever-expanding range of markets, enabling connectivity for users not only onboard aircraft and ships, but also for the huge Internet of Things communication.

The new platform will help Panasonic Avionics provide ubiquitous connectivity to its customers, thus boosting their operations with real time data across connected platforms.

Ericsson is already delivering its technology to industry-leading operators across the world for live commercial service.

ERICSSON LM ADR Price and Consensus

Touted as the next generation of mobile technology, 5G has achieved rapid momentum over the past year. 5G networks have the capability to radically lessen latency, accelerate download and upload speeds, enhance network reliability and spectral efficiency. Also, they have the potential to support IoT development, by considerably escalating the number of devices that can connect to the network simultaneously.

According to a research by Ovum, global 5G subscriptions are projected to reach 24 million by 2021, with Asia-Pacific having a 40% share and Europe accounting for 10%.

Ericsson continues to aggressively drive progress in 5G technology and is involved in multiple engagements with different operators across the world. It has already signed significant 5G agreements with telecom biggies, like Vodafone Group (VOD - Free Report) , Telefonica and Qualcomm Inc. (QCOM - Free Report) , to bank upon the commercialization of 5G technology.

We believe that strategic partnerships, dominant market share and favorable industry trends will aid the company to benefit significantly from the impending commercialization of the networks.

However, Ericsson is contending with stiff competition from Huawei Technologies Co. and Nokia Corp. Slumping demand in Russia and Brazil, and accelerating negative industry trends have further compounded its problems.

Whether the growth and cost-streamlining efforts of this Zacks Rank #4 (Sell) company will help it beat industry-wide demand blues, remains to be seen.

Stocks to Consider

A better-ranked stock in the same space is Harris Corp. (HRS - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Harris Corporation is an international company, focused on communications equipment for voice, data and video applications. The company has an impressive earnings surprise history for the trailing four quarters, beating estimates all through for an average of 4.2%.

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