Ericsson plays catch-up in IP market

Hoping to catapult into the Internet protocol space, Ericsson plans to acquire Torrent Networking Technologies and TouchWave Inc. Ericsson will pay $450 million in cash for Torrent and $46 million for TouchWave.

Torrent brings carrier-class, high-capacity IP edge routers to Ericsson's lineup. TouchWave is intended to pave the way to IP PBX systems.

The Torrent acquisition raises the question of whether its products will conflict with Internet backbone products from Juniper Networks, which Ericsson resells as a Juniper investor.

"The Torrent and Juniper products will work complementary to each other. The Torrent product has circuits feeding into the aggregation point and then sends a high-speed feed into the Juniper product," said Mike Thurk, Ericsson's general manager of business unit datacom networks and IP services.

Ericsson is running behind many other market players, said Bob Egan, research director with The Gartner Group. "They are once again reacting to moves that have been previously made by Nokia," he said.

Egan expects Ericsson to make an acquisition in the wireless LAN space very shortly to parallel the third piece of Nokia's acquisitions, Indoc.

It's not too late for Ericsson to join the game, Egan said, "but, once again, they are laggards here. They just continue to be reactive, and I am looking forward to a proactive leadership strategy [out of Ericsson]. So many times, Ericsson seems to be reading the news saying Nokia did this, now I better do something. [But] Ericsson is waking up to all those factors."