Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) has announced the appointment of its new CEO, Borje Ekholm, effective from January 17, 2016. Mr. Ekholm is one the members of the board of directors and the CEO of Investors Patricia Industries. Although the board has claimed that the appointment was made in light of Mr. Ekholm’s understanding of the technology and business at Ericsson, it is not being well received by the investors. It should be noted here that Investors Patricia holds a 22% stake in the company.

Lief Johansson, the chairman of the board at ERIC, pointed out that appointing a board veteran to lead the company means he has full understanding of the challenges and opportunities ahead. He also claimed that Mr. Ekholm has been known to forcefully execute on plans and strategic directions, which would significantly help Ericsson in its transformation. Mr. Ekholm would be facing the immediate challenge of improving the company’s finances, given that ERIC has delivered poor performance in the last few quarters.

In a telephonic interview, the new CEO claimed that this was a very exciting time at the company. He also stated that the management has a strategy in place and a long-term plan that they are focusing on, which would require ERIC to make tough strategic decisions. Mr. Ekholm further stated that he was not afraid of making such decisions and it was only a matter of priority and making refinements. He also voiced his view that there was a need to invest in technology and development, which would drive the top-line results. This means a reinvestment in the company’s core business.

In addition to this, Mr. Ekholm claimed that the transformation in software at Ericsson was only beginning and more services are to be offered in cloud technologies. He also stressed on the need to adjust the current business model, to address virtualization of networks. The new CEO concluded by hinting at the possibility of acquiring complimentary technologies in the new future.

Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) declined by 1.98%, during the October 27 trading session, to close at $4.94 per share, after having a trade volume of 13.65 million.