Ericsson

Ericsson's SEK 72.9 billion in 2024 revenue disguises a strategic migration observable in nature: populations moving toward resource abundance while abandoning depleted territories. North America grew 54% year-over-year while other regions declined significantly, mirroring how organisms concentrate in high-nutrient zones. This isn't market diversification—it's source-sink dynamics, where profitable markets subsidize presence in declining ones. The question isn't whether Ericsson can maintain global coverage, but whether sink markets drain resources faster than source markets replenish them.

The company's intellectual property licensing revenue—SEK 14 billion in 2024, up from SEK 11 billion in 2023—reveals mutualism's asymmetric power. Competitors pay to use Ericsson's 5G patents, funding R&D that widens the technology gap, forcing even more licensing payments. This is the biological equivalent of mycorrhizal networks: fungi exchange nutrients with plant roots, then use those nutrients to expand the network, attracting more plants. Ericsson doesn't just sell network equipment; it architects the substrate that makes modern telecommunications possible, then charges rent for access to the infrastructure layer.

The pivot to programmable networks and Open RAN demonstrates modularity's strategic advantage. By decoupling hardware from software and creating interoperable components, Ericsson reduces switching costs for customers while increasing its own flexibility. The adjusted gross margin expansion from 41.1% to 46.3% came largely from supply chain efficiency and commercial discipline—biological autophagy, where the organism breaks down unnecessary structures to fuel core functions. Ericsson shed underperforming divisions, renegotiated supplier contracts, and focused on high-margin 5G and enterprise private networks.

But the 2026 target of ≥13% EBITA margin exposes the constraint. Ericsson competes with Huawei (excluded from Western markets but dominant in developing nations), Nokia (similar portfolio), Cisco (enterprise networking), and Qualcomm (chipsets). The company's competitive advantage isn't technological superiority—all players have competent 5G implementations. The advantage is ecosystem position: Ericsson's patents, existing infrastructure deployments, and enterprise relationships create path dependence. Customers can switch, but the switching cost includes retraining, integration complexity, and potential patent disputes. This isn't a moat; it's adaptive inertia that buys time to reach the next phase transition before competitors erode the margin.