Don’t mention the "F" word to Ulf Ewaldsson, Ericsson AB (Nasdaq: ERIC)'s VP and head of radio products.

Or, if you do, brace yourself, because he has a lot to say about Femtocells, the upstart little home base stations.

First, Ewaldsson is sticking to Ericsson's long-held company line that the market for 3G femtocells is too limited and that the cost of the access points is still too high to make a business case. Also, Ericsson maintains that the case for femtocells is only for voice coverage, because WiFi in homes already provides data coverage. (See Ericsson's 3G Femto Issue, Managing 3G Femtos, Femto Chips Too Costly, and Ericsson Stalls on 3G Femtos .)

"Ericsson has nothing against femtocells," says Ewaldsson. "There is nothing that will stop Ericsson from taking that market with the best product the market has ever seen… If we wanted to do a femtocell, we could go to market in three months. But we have to do things that make sense."

Ericsson developed a GSM femtocell back in 2007, which was part of a home gateway that included a WiFi access point and DSL modem. (See Ericsson Unveils Femtocell.)

Despite Ericsson's verdict on the femto market, the Swedish wireless networking giant has not ruled out making its own 3G femtocell for consumer indoor use when the price is right. For Ewaldsson, that means when femtos are competitive in price with WiFi access points.

"When we start to do femtos, there is a tremendous opportunity for a new network solution that any of these startup companies are not capable of providing," he says.

For a consumer product, Ewaldsson says Ericsson would rather work with partners and integrate its own femto module than develop and manufacture a consumer device itself."But very few consumer manufacturers have jumped on to the femto train. Why? Economics," he says.

— Michelle Donegan, European Editor, Unstrung

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