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Nokia clocks AI gains as revamp takes shape
Nokia flagged early progress in a strategic shift focused on grasping AI-related opportunities in its Q2 results, where it expressed confidence on securing a buyer for its Enterprise Campus Edge business and unveiled a deal to up US manufacturing.
The vendor announced the under review campus edge business unit, which includes part of its enterprise private networks offering, is being shunted into its discontinued operations accounting bracket alongside the fixed wireless access CPE business it has already agreed to sell to Inseego.
Nokia deems an agreement to sell the business “highly probable”.
The forecast sale is part of a strategic change at the company unveiled by Nokia CEO Justin Hotard in November 2025, which reshaped the company in an attempt to take advantage of the AI boom.
In its results statement today (23 July), Hotard said he is “encouraged by the execution and progress we have made in a short period of time” since the plan was announced.
He noted order intake from its AI and cloud division more than doubled year-on-year to €2.8 billion.
Nokia booked a net profit of €5 million, down 95%, on net sales which were up 8% to €4.8 billion.
Its profit figures were hit by €390 million in charges taken in the quarter to fund accelerated restructuring efforts and other one-off costs.
Nokia noted with these factors stripped out it would have booked a 64% increase in its bottom-line.
Restructure
Nokia provided an update on ongoing restructuring projects.
It expects to spend a total of €800 million across 2026 on making the changes, some of which had been previously flagged.
Around €250 million relates to the concluding part of a programme commenced in 2023; €350 million are integration charges to simplify its business in China after taking full ownership of a JV there; and the remaining €200 million is going on “additional restructuring actions”, primarily in Europe.
On the latter, the vendor stated the actions were a “further step in simplifying Nokia’s operating model and allocating resources towards growth opportunities” without providing details.
US manufacturing
Alongside its numbers, Nokia announced a deal to buy NXP’s Chandler Semiconductor Fabrication campus in the US state of Arizona, subject to getting the regulatory nod.
The vendor explained it is part of long-term capacity planning and it would use the facility for Indium phosphide semiconductor production for optical components. With the purchase not expected to close until Q1 2029, it plans to lease some capacity at the site from early 2027.
Financial details of the deal were not disclosed.
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Ericsson cautions on rising component costs
Outgoing Ericsson CEO Borje Ekholm (pictured) warned higher component costs would impact profitability from its Networks business, as the vendor reported drops across its top line in Q2.
Ekholm highlighted Ericsson took action to mitigate component cost inflation and pledged the company would “continue to pursue internal measures and pricing action to help offset the effect” of likely continued increases in the coming quarters.
“We also expect some pressure on Networks adjusted gross margin in Q3 due to higher volumes of network rollout projects.”
Revenue declined 6% year-on-year to SEK52.7 billion ($5.4 billion) and net income 12% to SEK4 billion. The company attributed the decreases to lower IPR licensing revenue, reflecting a non-recurring benefit from a partial settlement in the comparable period of 2025.
Sales from Networks fell 8% to SEK33 billion due to negative currency impacts and declines in Europe and the Americas.
Its Enterprise division recorded a 19% sales drop.
The picture was brighter in Cloud Software and Services, with sales growing 3% to SEK14.7 billion.
Strength
The Q2 earnings report is the last to be overseen by Ekholm, who is due to leave at the end of September. His successor Per Narvinger will present Q3 figures.
Ekholm signed-off by stating Ericsson enters the next phase of facing pressures “from a position of strength”.
“Over recent years, we have strengthened our portfolio to capture the next wave of AI-driven connectivity. Building on our technology leadership in mobile networks, we have expanded into attractive growth areas, positioning Ericsson to capitalise as AI increasingly moves into the physical world,” he said.
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Ericsson names next Networks chief
Ericsson named David Hammarwall, an executive within its Americas division, to lead its Business Area Networks division, succeeding Per Narvinger, who is lined up to replace Borje Ekholm as CEO.
Hammarwall is currently head of Customer Unit T-Mobile in Market Area Americas, a position he has held since 2023. He joined Ericsson in 2007 and worked in various roles including as the heads of Product Area Networks, Product Line Radio and Product Line 5G RAN.
The appointment is due to take effect on 1 October, when current Networks chief Narvinger steps into the role of CEO. Hammarwall will also join Ericsson’s executive team.
Narvinger said Hammarwall had been a key leader in driving Ericsson’s technology.
Hammarwall added he takes on leadership of the networks unit at an interesting time, “where Ericsson is truly setting a new standard for network intelligence with AI in RAN by bringing powerful AI capabilities to service providers”.
“I’m very much looking forward to working with all the talented Network employees and to meet customers and partners to create outstanding value.”
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Ericsson races through French 6G research
Ericsson kept the heat on in a bid to be a frontrunner in 6G technology, though separately detailed a move at the recent FIA Formula 1 race in Japan showing it is keeping 5G firmly in its sights.
The vendor stated work to optimise RAN energy consumption under the Intention 6G programme is now at a mid-point. The initiative is a €12 million move contributing to decarbonisation targets set in the France 2030 scheme and is co-funded by domestic bank Bpifrance.
Ericsson explained the project targets delivering optimal RAN energy use while still meeting the needs of 5G and 6G traffic.
AI is playing a central role, driving work involving automating network functions, dynamic energy use and developing infrastructure which can adapt power consumption by itself.
Hitting the mid-point in the development means the focus of Intention 6G is now switching to defining the initial “building blocks”, Ericsson explained.
Christian Leon, head of Ericsson Western Europe, said the project is an example of how its French R&D centre is collaborating with domestic companies to develop networks capable of delivering “tomorrow’s critical use cases and digital transformations”.
French government information explains France 2030 is a €54 billion investment programme covering decarbonisation through technological innovation and promoting companies in key industrial sectors.
Ericsson emphasised the research programme demonstrates the benefits of broad collaboration brought about through public-private partnerships.
Racey.
The vendor today (17 June) separately detailed a trial of standalone 5G its Japanese unit completed with SoftBank Corp during the FIA Formula 1 Grand Prix held at the Suzuka Circuit in March.
Ericsson Japan and SoftBank employed five independent network slices, one of which involved mmWave to boost connectivity at the venue, a set-up the vendor explained enabled quality to be optimised for specific use cases.
The pair deployed tri-band Massive MIMO equipment and various mmWave radios, along with conducting “detailed network design”, all of which upped downlink data rates by 4.1-times and uplink 14.6-times over those SoftBank users received at the event in 2025.
Some base stations employed self-tuning to tweak the performance of individual network slices based on a quality measurement taken every minute.
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Ericsson CEO Ekholm set for exit
Ericsson announced CEO Borje Ekholm (pictured) will step down at the end of September, with current networks chief Per Narvinger set to be elevated to the top job.
Ekholm, who has been at the helm of the Swedish vendor since the start of 2017, will act as an executive adviser at the company when he relinquishes his position, until 15 June 2027.
Incoming boss Narvinger is currently head of Business Area Networks at the vendor, a position he has held since March 2025.
Prior to taking the networks brief, he headed-up its Cloud Software and Services division. He has been at the company his entire career, which started in 1997.
Ericsson chair Jan Carlson said Narvinger brings “deep technical knowledge of our industry as well as extensive commercial experience and has proved himself in several key leadership positions”.
Carlson added the outgoing chief’s tenure of almost a decade was “defined by extraordinary leadership and strategic advancements” asserting the company had solidified its position as a “leading provider of trusted communications networks”.
He credited Ekholm with challenging “traditional thinking” and positioning the company for long-term success.
Challenges
Ekholm joined Ericsson in 2017 during what he described at the time as a period of “intense change”, with the vendor mid-way through a significant restructure.
Reflecting on his time in charge, the executive stated “we have turned Ericsson around and emerged as a global communications and technology leader” since he arrived.
“Today, Ericsson is driving the transformation of mobile connectivity by changing how networks are used and commercialised, and we are leading the industry into the next stage of AI: the physical AI era. It is our ability to innovate, to adapt and to compete globally that continues to define us.”
He backed Narvinger as the “right leader to continue developing this great company”.
The incoming chief described the appointment as a great honour, adding he was taking over at a “pivotal time in our industry”.
“As AI continues to industrialise, this will increasingly require advanced connectivity solutions, an area where Ericsson is leading,” Narvinger said.
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