LG-Ericsson USA Debuts

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LG-Ericsson USA made its official debut Monday, marking not only the entry of a new voice and data player in the North American networking channel, but also the end of a long and winding road for the channel-centric piece of SMC Networks.

A long-established networking player, SMC in recent years ran into branding problems between its various indirect and direct sales channels, leading many solution providers to wonder if SMC had permanently de-emphasized channel sales in favor of retail and direct service provider sales.

To relieve the conflicts, SMC spun off its Business Solution Group to become Edgecore Networks in November 2009 -- a separate company doing more than 90 percent of its business through the channel but still a subsidiary of SMC parent Accton Technology.

From there, however, things got dicier. In January 2010, Korea-based LG-Nortel, itself a joint venture of LG and Nortel Networks, entered into a joint venture with Accton that gave LG-Nortel a 60 percent stake in Edgecore and Accton a 40 percent stake. The aim was to make Edgecore, headquartered in Irvine, Calif., the North America sales arm for LG-Nortel SMB voice and data products.

Nortel, however, was in the process of being sold off following its 2009 bankruptcy, which put the overall business in further limbo. Finally, Ericsson stepped in and bought Nortel's stake in the venture in April, for $242 million.

"That's why you haven't heard from us much in the past few months," said Tony Stramandinoli, vice president of marketing for the newly established LG-Ericsson USA.

Officially debuting Monday, LG-Ericsson USA is a joint venture of LG-Ericsson (which owns a 60 percent stake) and Accton (40 percent). SMC Networks also still exists, and is also a subsidiary of Accton, but sells to multi-service operators (MSOs) and is now direct-only model.

"We maintain all of the channel business we had in the past," Stramandinoli said in a recent CRN interview, describing a legacy North America channel that comprises between 3,000 and 3,500 North American data networking VARs.

The plan for LG-Ericsson USA is to offer the channel the data networking portfolio that they know from the SMC heritage, and also to introduce new voice, data and other IP networking products -- including the venture's first-ever hybrid TDM (time division multiplexing), and IP-capable PBX products -- all of which will be branded under LG-Ericsson USA.

In addition, the company maintains what were SMC's, then Edgecore's, distribution relationships with Ingram Micro, Tech Data and other distributors. It will seek to recruit voice-savvy VARs and other net new channel partners as well, Stramandinoli explained.


Next: New Products, Channel Program On The Way

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