It took 5 years to the electronics industry to finally reach the same level it had prior the telecom crisis in 2001.

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With 1 069 billion euros in 2005, the electronics industry finally surpassed its previous record year in 2000 when it reached 1 000 billion euros for the first time in its history, the 2001 crisis now belongs to the past, according to the new edition of "World Electronic Industries: 2005-2010", published in July by DECISION.

More interesting are the growth perspectives over the medium term. With 6% average growth from 2005 to 2010, the electronic equipment production still grows 2 times faster than the World Growth Domestic Product, fuelled by the development of electronics in every application segments, from mass markets to professional electronics. Pervasion is still in progress.

With very good positions in Automotive, Industrial and Aerospace & Defence industries, Europe does offer good perspectives in terms of electronic production. With an average growth of 3.7% from 2005 to 2010, It will still represent about 20% of the World electronic equipment production in 2010, equivalent to North America but behind China which will produce 28% of the world electronic equipment by the end of the forecast period.

DECISION believes that the global electronic production landscape is reaching a new equilibrium between the more developed and the emerging countries. Production vs. market ratios per zones should stabilize over the forecast period with Asian countries still producing about 60% more than their local demand.

First signs of this new trend are already there as illustrated by the investments of Asian leaders of the flat TV industry in new flat screen TV assembly and module plants in Eastern Europe.

How simplistic it may seem, there is one undisputed explanation to this new development of the world electronic industry: Production follows the Market!


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Fuelled by the demand in less developed countries that is gaining momentum over more mature markets, the mobile subscriber base is expected to reach 3 billions people in 2008, i.e. a net increase of 1 billion mobile phone users over the next 3 years.
By the end of the decade, more than half of humanity will use a mobile phone to communicate representing 3.6 billion users worldwide.
This turns into a mobile phone market of >1 billion units as soon as 2007, and 1.4 billion units in 2010 (+11% growth between 2005 and 2010).

Growth in value terms also offers good perspectives. The mobile phone demand should represent 138 billions euros in 2010 from 94 billions in 2005, i.e. an average growth of 8%. Average price decline being offset by the dynamism of high end terminals (3G, smartphones) in mature markets (Europe, North America, Japan), and the limited penetration of ultra low cost end handsets that will only represent 10% of global shipments in 2010.

European mobile phone production still represents 22% of global mobile terminal revenues in 2005 (21 billion euros). The European share of mobile terminal production is expected to fall to 17% in 2010 as Asian production continues to increase its share in the mobile industry (>60% of world mobile phone production in 2005 located in Asia) with the emergence of India as a second major production hub in the region after China during the period 2005-2010.

Importantly enough, European mobile terminal production will continue to grow in average at 2.5% between 2005 and 2010, ultimately reaching 23 billion euros! “Made in Europe” mobile phone are not bound to disappear anytime soon!

The European Parliament has adopted the first "Competitiveness and Innovation Framework Programme" (CIP). Between 2007 and 2013, some 350,000 small and medium-sized enterprises (SMEs) will receive € 3.6 billion in EU support to invest in all forms of innovation and growth. The new programme will support actions to help enterprises and industry to innovate. It will also boost energy efficiency and renewable energy sources, environmental technologies and a better use of information and communication technology (ICT).

CIP is composed of three specific programmes:
(1) Start up and growth of SMEs: the “Entrepreneurship and Innovation Programme” with a budget of € 2.17 billion including € 430 million to promote eco-innovation.

(2) Information and communication technologies: the “ICT Policy Support Programme”, with a budget of € 730 million, will contribute to competitiveness, growth and jobs through stimulating a wider adoption and more efficient take up and better use of ICT.

(3) Increased use of renewable energy and reduced energy consumption the “Intelligent Energy-Europe Programme” with a budget of € 730 million will support energy efficiency, new and renewable energy sources, and technological solution to reduce greenhouse gas emission cause by the transport sector.

Competitiveness and Innovation Framework Programme

This transaction represents the creation of a new world leader in smart cards and digital security, with 2005 pro forma revenues of approximately EUR 1.7 billion ($ 2.2 billion), operations in 120 countries, large operational centers in the Paris and Marseille areas, and 11,000 employees including 1,500 R&D engineers. After further review, Axalto and Gemplus have reconfirmed their initial estimate of the synergies arising from this transaction, expected to amount to EUR85 million (US$100 million) per year on a fully-phased basis.

Saab is acquiring Ericsson Microwave Systems (EMW) which has approximately 1250 employees in Gothenburg, Sweden. The acquisition adds radar and sensor operations to Saab's product portfolio in defence, aviation, space and civil security. The purchase sum is SEK 3,8 billion. The purchase also includes the Ericsson 40 percent share in Saab Ericsson Space, a subcontractor for equipments to commercial satellites.

Saab and EMW have been working closely together for a long time. EMW currently delivers the radar for the Gripen fighter. The acquisition enables Saab to create scope of action to secure the Gripen's long-term development.

EMW's defence operation has supplied more than 3000 radar systems in over 30 countries. EMW's operations within National Security and Personal Safety as well as Power Systems, with a total of 300 employees, will remain part of Ericsson.
The defence operation within EMW has sales of approximately 2 billion SEK and at the start of 2006 had order backlog of approximately 3.5 billion SEK. Exports make up approximately 65 percent of turnover.

In an other deal, Ericsson offered €30 million to buy the IP-telephony and communication specialist Netwise.