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Ericsson CEO Hans Vestberg was in upbeat mood, despite the huge pressures on his company's core markets, at a Capital Markets Day in Stockholm. He claimed Ericsson has twice as much market share as Huawei, well ahead of most estimates, and made his most explicit statements yet about building an increased revenue stream from the company's vast store of patents.

The company, one of the lead IPR holders in LTE, said it aimed to increase revenue from its stockpile of over 27,000 patents as these turned up in an ever-wider range of connected devices, from toys to smart meters. "By 2015 two thirds of all consumer electronics devices will have some sort of connectivity," CEO Hans Vestberg said in an interview. "Any company or manufacturer that wants to get in there will need an agreement with Ericsson." The cross-licensing agreements which Sony will take when it buys out its partner's share in their handset venture may end up being worth more than the JV's actual products.

Vestberg said Ericsson owned the industry's largest portfolio of wireless communication patents and exploiting this more effectively for revenue would help offset the increasingly fluctuating nature of its core network business. He boasted of IPR which covers "basically everything in the telecom industry", including the world's largest collection of Wi-Fi patents. Already, IPR revenue has doubled between 2006 and 2010, to reach SKr4.6bn ($704m). Helena Nordman-Knutson, an analyst at Pareto Oehman, told Bloomberg that Ericsson's patents could be valued at as much as $15.5bn, based on the price Google paid for Motorola's intellectual property.

However, Vestberg acknowledged that the traditional system of secret, bilateral agreements common in handsets would not work in the world of billions of wireless gadgets. "If we are going to get 50bn connected devices in 2020 it's not only going to be handsets," he said. "It's not going to be practical for us to make bilateral negotiations with all the manufacturers. We need new business models and we need to work in groups." This hinted at willingness to join patent pools, a structure to which Ericsson, along with Qualcomm, has always been hostile. And the web players are not safe from the Swedish behemoth. Vestberg warned that the firm intends to collect royalties from patents it has not previously monetized, in areas from web search to optical networks.

Meanwhile, the CEO said Ericsson had increased its share of the mobile infrastructure sector by four percentage points over the past six months, which means it now has 36%, up from 32% in May 2011, and more than double the share commanded by nearest rival Huawei. This will delight investors, since many analysts have assumed Huawei has been closing the gap on its competitor. However, the Chinese company has been unable to secure major telecoms equipment deals in the US - Ericsson's largest market since the acquisition of most of Nortel - because of security concerns.

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