“Group sales in the quarter increased 8% year-over-year and 32% sequentially mainly driven by a strong development in mobile broadband” says Hans Vestberg, President and CEO of Ericsson (NASDAQ:ERIC). “Sales in the quarter for comparable units, adjusted for currency and hedging, increased 7% year-over-year. Adjusted cash flow in the quarter was strong at SEK 16.2 (13.6) b. and SEK 29.8 (28.7) b. for the full year.
Sales growth returned during the second half of the year and cash conversion for the full year amounted to 112%. Net income 2010 increased 172% to SEK 11.2 (4.1) b. mainly due to improvements in earnings in Sony Ericsson and less restructuring charges. The Board of Directors proposes a dividend for 2010 of SEK 2.25 (2.00).
Sales in Networks increased 14% year-over-year and 40% sequentially, primarily driven by increased demand for mobile broadband and investments in 2G expansions in China. While the supply of components has normalized during the quarter, we are still not fully meeting the increased demand on certain mobile broadband products.
Global Services sales decreased -1% year-over-year and increased 20% sequentially. The year-over-year decline is a result of lower levels of network rollout following the industry wide component shortage earlier in the year as well as a negative impact from a strong SEK. Managed services grew 5% year-over-year and with 16 contracts signed in the quarter, the positive business momentum remains unchanged. Multimedia sales recovered and grew 3% year-over-year and 50% sequentially with positive development within revenue management.
2010 marks the first year of 4G/LTE and we have established a clear lead in this area. Our strategy to strengthen our position in key markets such as the US and Korea as well as increased footprint in the ongoing network modernization has also been successful during the year. Although network modernization projects, along with the 3G rollouts in India, puts initial pressure on gross margin these projects are important parts of our efforts to strengthen our platform for continued long-term growth and profitability.
In 2010, mobile broadband subscriptions increased 30% to approximately 500 million, still only representing some 10% of total mobile subscriptions. We expect the strong uptake for mobile broadband to continue in 2011, with number of mobile broadband subscriptions expected to double and hit one billion already this year. This will be driven by more smartphone devices, including entry level smartphones as well as tablets. Mobile data traffic is forecasted to almost double annually over the coming years. We are well positioned to support our customers in meeting the changing consumer behavior,” concludes Hans Vestberg.