Rebecca Engmann*

In recent years, the presence of wireless flagships Ericsson Mobile Platforms, Nokia and Sony Ericsson has generated a high profile for Øresund Region expertise. Shared technology and product development outsourcing have encouraged emerging companies to set down roots in the Øresund region, where the drive for new features and functionality on Nokia and Sony Ericsson wireless devices has provided a platform for upstart companies to woo the major producers.

The resulting "wireless ecosystem" has become a magnet for innovative new developers in the region. Companies like North-American Nypro, Tawainese Foxconn and Finnish Botnia Hightech have recently decided to establish representations in Copenhagen to be closer to Nokia Mobile Phones, where they cooperate with the phone producer. Several other companies like Finnish Microcell, Teleca and HiQ have been in the region for years, where they not only take advantage of the proximity to the mobile giants but also benefit from the local expertise in mobile technologies.

Horizontal model

"The handset industry value chain is breaking up from a vertical integration model (i.e when one provider did everything) to a horizontal where companies specialize on each part," explains Alexandra Krook, Vice President of Marketing and Communications at Ericsson Mobile Platforms, which employs approximately 600 people in Lund, on the Swedish side of the Øresund. "Ericsson Mobile Platforms, as a core technology solutions provider, is used to working within this horizontal ecosystem of customers, partners and suppliers."

According to Nina Eldh, Sony Ericsson's Vice-President of Corporate Communications, roughly one-quarter of the global giant's 4,000 employees worldwide are also based in Lund, the company's most important centre for R&D, and home to one of Sony Ericsson's Creative Design Centres.

Nokia - a global Goliath on the mobile phone market - is typically synonymous with Finland. But the company has several divisions and a staff of 1,200 based at
its facility in Copenhagen's Teglværkshavnen. Approximately 1,000 of these workers are involved in research and development, most of them working for Nokia Mobile Phones department. Nokia's Copenhagen headquarters is the company's largest so-called Production Creation Centre outside Finland.

Danish R&D expertise has proven pivotal in developing the most basic and streamlined of Nokia's product line that is marketed toward the "pedestrian" mobile phone user who's simply looking for basic functionality. This product line - and Nokia's relations with Danish and Swedish wireless companies don't stop there.

Several companies are apparently convinced of Nokia's decisive importance in the GSM market. Components manufacturers, like Samsung Electro-Mechanics and Rohm, have recently also decided to come to the Øresund Region.

Imaging: growth area for new suppliers

Other companies have found that offering their expertise in specialty fields is one way of addressing larger mobile producers' need to implement new features quickly and reliably.

Lund-based Scalado is one company that has turned a burgeoning trend - wireless telephone imaging - as an avenue for partnership with mobile giant Sony Ericsson. Billing itself as "the mobile imaging expert," Scalado has become an exciting new provider of technologies for camera phones, with pixel-based products that provide interactivity for mobile phone pictures (CAPS), and an online tele-photo album (PhotoServe) which allows for viewing and sharing of telephone picture files.

"Our partnership with Sony Ericsson has been important, in the sense that it's good to have a corporate customer as proof of concept. The fact that Sony Ericsson has been focusing on mobile imaging is proof that there's a need for this technology on the market," said Pierre Elzouki, a co-founder of Scalado, now the company's Vice President in charge of business development and investor relations.

Scalado is hopeful that its high-profile ties to Sony Ericsson will bring the kind of market explosion on mobile imaging products that occurred in Japan. Analysts predict that, by 2008, 66% of all mobile phones on the European market will come installed with imaging technology.

TAT's appeal to Sony Ericsson

Lund-based company TAT, The Astonishing Tribe AB, is one of the region'ss most fascinating tech success stories. TAT works with digital visual experiences, targeting two markets, one which provides visual effects and post-production services for media companies, and one which is focused squarely on the telecom industry.

TAT's telecom division specializes in handset differentiation-making handsets more distinct and alluring to consumers - with an emphasis on so-called "soft enhancements" - enhancements to the body of a mobile handset that do not change the essential hardware.

"Technology, especially in combination with design is becoming more and more important, as the visual experience becomes an important matter for the end-consumer. For that reason, mobile phone manufacturers are constantly being challenged to stretch the limits of what can be visually achieved on their handsets, to differentiate themselves and their products," said TAT marketing manager Hampus Jakobsson.

The ODM is here to stay

Since 1997, Finnish-based company Microcell has been active as a turnkey supplier, known within the industry as an Original Design Manufacturer (ODM). In 2001, the company opened branch offices in Copenhagen and the United States, and has provided mobile phone design for Sony Ericsson. Microcell, which was in the beginning of 2004 acquired by Flextronics, works exclusively for wireless providers, offering expertise in system architecture, silicon design, reference design, industrial design, product creation, volume production, and logistics management.

According to Microcell communications director Jan Ahrenbring, major brands like Sony Ericsson and Motorola have stumbled upon a mutually beneficial relationship with ODM companies, dictated by the wireless consumer's thirst for product diversity.

"I think in the foreseeable future, we'll continue to see large companies like Sony Ericsson outsourcing their product development. The rationale is simply that the market demands a varied product portfolio. ODMs are in a period of extremely fast growth. Of the roughly 500 million mobile phones sold worldwide in 2003, 75 million were developed by Original Design Manufacturers. In 2004, the overall number of units sold worldwide is expected to reach 550 million, of which 130 to 150 million will have been produced by ODM's. So the trend is here to stay," said Ahrenbring.

This article was originally published by Øresund IT Magasine (nr. 4 - 2004). You can download the magazine in PDF format on Publications.

*Rebecca Engmann is an American journalist living in Copenhagen.

More information: R&D companies > Wireless