Gilles Delfassy, the CEO of ST-Ericsson, is going to have a really short work week; Wednesday will be his last day. Didier Lamouche, who has been with STMicroelectronics for about a year now, and before that was the CEO of a French IT company for half a decade, is going to be the new man in charge. So why the switch? ST-Ericsson is going to turn 3 years old this coming February and they’ve yet to have a profitable quarter. Didier will be the 3rd CEO who is going to try to change that. Why can’t these guys make any money? A lot of their business used to come from a once great handset vendor who today is quickly being threatened from both the low and high end by vastly more competent companies. Can you guess which company we’re talking about? It’s Nokia. ST-Ericsson has an impressive product portfolio, they’re responsible for the 21 Mbps radio in many of T-Mobile’s products, but sales from those new products aren’t yet large enough to compensate for the lost Nokia business.
Now earlier this month ST-Ericsson proudly said that Nokia will be using their chips for upcoming Windows Phone devices, but that immediately raised some flags. Isn’t Microsoft the one in charge here when it comes to dictating which hardware is Windows Phone compatible? And if ST-Ericsson silicon is officially sanctioned, then are we going to see Windows Phone become fragmented in terms of the capabilities that it’ll be able to offer between different devices?
Didier has a tough road ahead of him, though everything’s in place for him to succeed. ST-Ericsson sells everything you need to make a smartphone (CPU, GPU, connectivity), now they just need to get more companies to use their stuff instead of going with today’s giant: Qualcomm. How exactly are they going to convince said companies?
That’s the hard part.