Once a perennial favorite in the cell phone game, Motorola Solutions (formerly Motorola) hung up that business as mobile phone users enjoyed a wider selection of phones offered by industry leaders such as Nokia and Samsung. The company focused instead on products for business and government clients, including two-way radios, mobile computers, bar code scanners, and wireless broadband products used in private voice and data networks and public safety communications systems. More than half of sales come from customers in the US. Motorola changed its name to Motorola Solutions when it spun off its handset and set-top box units as Motorola Mobility in 2011.
Both Motorola Solutions and Motorola Mobility continue to use the Motorola brand, however, with Motorola Mobility owning and licensing the brand to Motorola Solutions. How this arrangement will proceed following the planned acquisition of Motorola Mobility by Google is uncertain. Google agreed to pay $12.5 billion for the wireless phone maker in 2011 to supplement its mobile business (which centers around the open source Android operating system) as it looks to enter the battle with Apple for the smartphone crown.
Motorola's cell phone business had contributed to annual losses for the company. The company reasoned that the separation would give its remaining business a better chance for success by providing a clear focus on next-generation communications products for government, public safety, and enterprise customers. Even prior to Motorola Mobility becoming a separate entity, Motorola reported a small profit ($633 million) in 2010 for the first time since 2006.
Overall sales were up 8% in 2011 over 2010, and profits rose to $1.1 billion for the year. Sales increased 11% in its Enterprise business, driven by demand in the retail, logistics, and transportation markets. New products, including a ruggedized handheld mobile computer and an enterprise-class tablet computer for retail and manufacturing industry verticals, also contributed to higher sales. In the government market, which accounts for around two-thirds of sales, Motorola Solutions recorded a 6% increase for the year. While global government spending remains tight for the most part, customers continue to support funding for public safety, an important growth market for the company. Motorola Solutions has continued to focus development efforts on next-generation products for private broadband networks based on the LTE standard.
As part of its change in focus, the company sold much of its wireless network infrastructure equipment business to Nokia Siemens Networks for $975 million in 2011. The deal included product lines based on GSM, CDMA, WCDMA, WiMAX, and LTE wireless standards, and boosted the profile of Nokia Siemens Networks in the global wireless equipment industry, particularly in the key markets of Japan and the US. In addition, later that year Motorola Solutions announced plans to shed its Orthogon point-to-point and Canopy point-to-multipoint wireless broadband network businesses to investment firm Vector Capital.
Motorola, originator of the clamshell handset, had its biggest hit with the RAZR phone model (introduced in 2003), which sold more units than any other wireless handset in history. It took the iconic iPhone to unseat it in 2008. This milestone underscored the lack of smartphones in its product line up, a fact that contributed to the company's faltering position in the market as competitors like Apple, Research in Motion, HTC, and Samsung each rolled out several smartphone models to meet consumer demand. The company tried to play catch-up in this area, and gained some ground with the introduction of a line of phones based on Google's Android operating system. Even so, global handset sales were down by about 40% in 2009 and Motorola's market share declined to less than 4% that year.
In 2010 Motorola's largest individual investor, Carl Icahn, upped his ownership in the company to more than 11% by purchasing additional shares. In early 2012, Motorola Solutions paid around $1.17 billion for some 24 million shares of its stock from Icahn, leaving him holding slightly less than 5%.
In 2012 Motorola Solutions paid $200 million in cash for Psion Plc, a maker of ruggedized mobile computing products, to expand its product line and boost its presence in Europe.