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Motorola Solutions
Company Profile
Copyright 2020, Faulkner Information Services. All
Rights Reserved.
Docid: 00021172
Publication Date: 2002
Report Type: VENDOR
Preview
A leading provider of mission-critical communication solutions and
services for government and commercial customers, Motorola Solutions
manufactures two-way radios and accessories that are used primarily in the
public safety sector, as well as barcode scanners, mobile computers, RFID
solutions, private radio systems, and wireless network infrastructure
equipment. This report provides details on the company’s history and
recent activity.
Report Contents:
Fast Facts
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Name: Motorola Solutions, Inc.
Headquarters
1303 East Algonquin Road
Schaumburg, IL 60196
Phone: (847) 576-5000
Web: http://www.motorolasolutions.com/
Founded: January 2011, when the split of Motorola into
two companies was finalized (Motorola was founded in 1928)
Number of Employees: 17,000 in 60 countries
Stock Symbol: MSI (NYSE)
Profile
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Founded in 1928 as the Motorola Corporation, Motorola Solutions was
formed in January 2011 when the parent company was split in two: Motorola
Mobility (the Motorola cell phone business) and Motorola Solutions (the
remaining products and services).
With 17,000 employees in 60 countries and over 100,000 customers in 100
countries, Motorola Solutions serves both national and international
government and commercial customers. Motorola Solutions specializes
in public safety communications from infrastructure to applications to
devices, such as radios and task-specific mobile computing systems.
History & Milestone Events
Founded in 1928, Motorola completed its split into two public companies
in January 2011: Motorola Solutions, Inc. and Motorola Mobility, Inc.
- 1928 – Motorola is founded by Paul V. Galvin in 1928
as the Galvin Manufacturing Corporation. Its first product, a battery
eliminator, lets consumers operate radios directly from household
current. During the 1930s, the company successfully commercializes
car radios under the brand name Motorola. - 2005 – Motorola president and COO Mike Zafirovski
steps down from his positions after being appointed to them by then-CEO
Christopher Galvin in 2002. Zafirovski had been a candidate for the CEO
position when Galvin resigned, but Ed Zander was named instead. Motorola
reduces its workforce, spins off the semiconductor business, and
introduces new handset models in a successful attempt to gain market
share. Instead of replacing Zafirovski, Zander takes over his
responsibilities, and the heads of the business units report directly to
him. Motorola later files a lawsuit against Zafirovski, who is named by
Nortel’s board of directors as president and CEO, alleging the former
employee breached several agreements with the company by accepting that
role. - 2007 – Activist investor Carl Icahn raises his stake
of Motorola’s shares to 2.9 percent from 2.7 percent. Icahn fails to
gain a seat, but his initiatives raised doubts about Motorola’s
direction. After a disappointing second quarter, Motorola undergoes a
company-wide reorganization. When the company fails to rebound in the
third quarter, rumors grow that Icahn will again start a proxy war, this
time calling for Motorola to split into two separate entities. - 2008 – Motorola announces it will split its
operations into two businesses, one for its handset and handset
accessories businesses and the other for wireless broadband networks and
communications services. Gregory Q. Brown and Sanjay Jha are named
co-CEOs of Motorola for the two spin-off companies. Motorola
acquires AirDefense and sells off its biometrics business to Sagem
Morpho; announces 3,000 employee layoffs. - 2009 – Motorola sells its Good Technology unit, which
it acquired in 2006, to VISTO, and announces plans to lay off 4,000
employees. Motorola sells off the biometrics division to SAFRAN
Group. - 2010 – Motorola acquires SecureMedia and BitBand.
Motorola announces it will separate into two publicly traded entities in
early 2011. Nokia Siemens Networks agrees to buy Motorola’s
wireless-network equipment business for $1.2 billion. - 2011 – In January, Motorola completes its split into
two public companies: Motorola Solutions, Inc. and Motorola Mobility,
Inc. - 2012 – Motorola Solutions Venture Capital invested in
Fixmo, a provider of mobile security, compliance, and risk management
solutions for the public and private sectors. It also acquired Psion
Plc. for US $1.36 USD in cash per Psion share. Motorola Solutions folds
Psion into its Motorola Solutions’ Enterprise Mobile Computing (EMC)
business. - 2016 – In February, Motorola Solutions competed its
acquisition of Airwave Communications for approximately $1 billion USD.
Through this acquisition, Motorola Solutions is looking to expand its
managed and support services business. Airwave provides voice and data
communications to more than 300 emergency and public service agencies in
Great Britain. - 2017 – In July, initiated patent infringement
proceedings against Hytera Communications in China and Australia,
claiming that Hytera digital mobile radios infringe on Motorola’s
patents. - 2018 – Reported plans to acquire Avigilon, a provider
of security surveillance products and services, through a transaction
worth approximately $1.0 billion USD. - 2019 – Acquired VaaS International Holdings and its
subsidiary Vigilant Solutions, which is a license plate reading
technology company, for $445 million USD. - 2020 – Received approximately $765 million USD
through a federal jury ruling that decided China’s Hytera Communications
had stolen trade secrets from the company and had engaged in copyright
infringement.
Strategy
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To better focus on government and public safety products and services, in
April 2014, Motorola Solutions sold the company’s Enterprise business to
Zebra Technologies Corporation for $3.5 billion USD in cash. (As
part of the deal, Motorola kept its iDEN product line.)1
New Markets. Motorola Solutions intends to
leverage its products and services for markets outside of the public
safety and commercial markets the company traditionally serves. New
product introductions in recent years include products which may also be
used in:
- Hospitality
- Mining
- Military
- Transportation
- Education
- Utility
Motorola is also pursuing geographical diversification by investing in:
- Different regional interfaces
- Multiple languages
- Tailored form factors
- Unique feature sets
Strengths
Brand Recognition. Motorola is an iconic brand,
which entered the American consciousness in 1939 with the first
commercially successful car radios.2 Additionally,
Motorola Solution’s design philosophy incorporates “High Velocity Human
Factors” investigation, an area of cognitive research that helps the
company develop products for first responders by working with them in
crisis situations to study their communication needs.
Research & Development. Motorola Solutions
understands the critical nature of R&D, with programs focused on the
development of:
- New public safety devices, infrastructure, and solutions
- Public safety broadband solutions based on LTE technology
- Smart public safety applications that include voice, data, and video
Intellectual Property. Motorola Solutions has more
than 6,900 owned and pending patents.
Weaknesses
While the leaner Motorola Solutions is better positioned to succeed than
its now defunct Motorola parent, Motorola Solutions could still be tested
in the months and years ahead. Company management is concerned about a
number of factors:
- Compared to Motorola Corporation, Motorola Solutions has “diminished
purchasing leverage and increased exposure to market fluctuations.” - The economic outlook for the government and enterprise communications
industries remains uncertain, especially given the lingering effects of
the Great Recession. - Sequestration in the US could cause the deferment or cancellation of
purchase orders by federal customers. Motorola Solutions’ largest
customer is the US government. According to the company, “The loss
of this customer could have a material adverse effect on our revenue and
earnings over several quarters, because some of our contracts with the
US government are long-term.” - An unstable political environment overseas could threaten Motorola
Solution’s manufacturing and business operations. - Motorola Solutions’ large systems and managed services contracts
render the company vulnerable, including risks related to the fact that
certain customers require that Motorola Solutions build, own, and
operate their systems, often over a multi-year period.
Outlook
Despite its heritage, Motorola Solutions is a relatively new company; it
therefore needs time to “find itself.” In the interim, company
revenue is steady, and recent environmental events may spur sales of
public safety infrastructure and services. In fact, the effects of
climate change, including increased storm intensity, should provide a
perverse stimulus to Motorola Solutions’ principal businesses.
Financials. For the fourth quarter of 2019, the
company reported non-GAAP earnings per share of $2.94, an increase of 12%
from 2018. For the full year 2019, revenue was $7.9 billion, an increase
of 7% due to growth in the Americas. Revenue from acquisitions was $312
million. GAAP operating earnings were $1.6 billion, an increase of $326
million or 26%. Non-GAAP operating earnings were $2 billion, an increase
of $235 million or 14%.
For 2020, Motorola Solutions expects non-GAAP earnings per share to fall
in the range of $8.65 to $8.80 per share, and revenue to increase
approximately 4%. For the first quarter, it expects non-GAAP earnings per
share to fall between $1.30 and $1.35 per share and revenue to grow
approximately 2%.
Product Lines
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|
Product/Service Line |
Description |
Competitors |
|---|---|---|
|
Products |
The Products segment offers an extensive
|
Airbus Alcatel-Lucent Harris Honeywell Hytera Kenwood Sepura |
|
Services |
The Services segment provides a full set of service offerings for government, public safety and commercial communication networks including: (i) Integration services, (ii) Lifecycle Support services, (iii) Managed services, (iv) Smart Public Safety Solutions, and (v) iDEN services.
|
Airbus Alcatel-Lucent Harris Honeywell Hytera Kenwood Sepura |
Major Competitors
- Alcatel-Lucent: http://www.alcatel-lucent.com/
- Harris Corporation: http://www.harris.com/
- Honeywell International: http://www.honeywell.com/
Activity
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Mergers, Acquisitions, and Divestitures
Motorola
Solutions acquired WatchGuard, Inc, a US-based provider of
mobile video solutions. The acquired company designs and
manufactures in-car video systems, body-worn cameras, evidence
management systems, and software. Motorola Solutions noted that
the purchased assets will be used to expand its own ecosystem by
combining the newly acquired technology with fixed cameras and
advanced analytics from Avigilon and license plate recognition
(LPR) cameras and software from Vigilant Solutions. No terms for
the agreement were disclosed.
(07/18/2019)
Motorola
Solutions announced that it has acquired Avtec, Inc, a
provider of dispatch solutions for public safety and commercial
customers. The new acquisition, which is based in South Carolina,
provides voice over internet protocol (VoIP) dispatch services
over land mobile radio (LMR) and broadband networks. Its
customers include airlines, railroads and energy companies.
Motorola Solutions expects the purchased company’s assets to
help it expand its own land mobile radio and broadband platforms
for both public safety and commercial customers. No financial
terms for the transaction were disclosed.
(03/11/2019)
Products and Services
Motorola
Solutions announced the launch of MOTOTRBO
Nitro, a new “end-to-end enterprise communications solution
with premium voice communications and lightning-fast private
broadband data.” According to the company, the new offering
employs the CBRS (Citizens Broadband Radio Service) spectrum
to provide better indoor coverage for voice and data across an
entire organization, as well as faster private broadband data
with twice the capacity and up to four times the range of
Wi-Fi-based alternatives. Motorola Solutions also noted that it
designed MOTOTRBO Nitro to be scalable to growing customer
needs, including the future integrations of video surveillance, a
secure operations center, or introducing artificial intelligence
(AI) and analytics to it.
(03/18/2019)
Personnel and Organizational
Motorola
Solutions has named Dr. Mahesh Saptharishi as the
company’s new chief technology officer. The 20-year veteran of
the industry will be called on to lead the company’s platforms in
mission-critical communications, video, and command center
software. Areas of particular focus for the new exec are expected
to include “applications that bring together artificial
intelligence (AI) and human intelligence to rapidly interpret
vast quantities of data, as well as new user interfaces for
efficiently delivering information.” Saptharishi comes to the new
role from Avigilon, a Motorola Solutions company specializing in
video analytics solutions. There he served as CTO for five years.
(03/12/2019)
Financials
Motorola
Solutions publishes its Q2 2019 financial results. For the
period, the company’s revenue reached $1.86 billion, up from the
previous second quarter’s $1.76 billion. Net income was $207
million, or $1.18 per share, compared to the $180 million or
$1.05 per share posted for the year-ago quarter. On these
results, Motorola Solutions predicted FY 2019 revenue growth of 7
to 7.5 percent, as well as expected earnings per share in the
range of $7.67 to $7.77.
(08/05/2019)
Legal News
Motorola
Solutions announced that the Patent Trial and Appeal Board of
the United States Patent and Trademark Office (USPTO) has
issued a final written decision on its case with Hytera
Communications Corporation. The decision relates to four patents
held by Motorola Solutions involving time-division multiple
access (TDMA) technology. Hytera had challenged the validity of
these patents, sparking a widening legal battle in which Motorola
Solutions has since accused Hytera of infringing on its own
intellectual property with its i-Series products. Hytera also
previously attempted to have Motorola Solutions’ patents
invalidated by the International Trade Commission. This is the
fourth case between the two surrounding the same intellectual
property.
(05/21/2019)
Web Links
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- Motorola Mobility:
http://www.motorola.com - Motorola Solutions: http://www.motorolasolutions.com
References
1 Mark Scott. “Motorola Solutions to Sell Enterprise Business
for $3.5 Billion. The New York Times. April 15, 2014.
2 The New York Times.
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