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 is 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. The company traces its historical roots to the 1930s.
Change of Company Type
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. Google later paid $12.5 billion for Motorola Mobility in 2012 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.
The company has a worldwide presence in the Americas, Europe, the Middle East, Africa, and the Asia/Pacific. The US accounts for 55% of its net sales.
Motorola's operations are divided across two main segments: government (around 70% of total sales each year) and enterprise (30%).
Sales and Marketing
Motorola's major customer groups include the education, government, health care, hospitality, human services, manufacturing, petrochemical, public safety, retail, transportation and logistics, utilities, and wholesale distribution sectors.
The company spent $95 million on advertising in 2012.
After years of significant losses, the company saw its revenues rise by 6% from $8.2 billion in 2011 to $8.7 billion in 2012. However, its profits declined by 24% from $1.2 billion in 2011 to $881 million in 2012 due to higher operating expenses.
Sales from its government segment were up by 12% in 2012, and sales from the US and China jumped by 9% and 7%, respectively.
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 sold its Orthogon point-to-point and Canopy point-to-multipoint wireless broadband network businesses to investment firm Vector Capital.
The company is focused on launching new products to its targeted customer base and by growing from acquisitions. 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. Two years later it bought Twisted Pair Solutions, which provides software that allows smartphones, tablets, desktop PCs, and two-way radios to interoperate. Twisted Pair Solutions became part of Motorola's Government Solutions business.
In 2014 it agreed to sell its enterprise business (nearly a third of sales) to Zebra Technologies for nearly $3.5 billion. Revenue for the segment has been declining as customers have delayed orders and cut spending amid a challenging macroeconomic environment.
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, BlackBerry, HTC, and Samsung each rolled out several smartphone models to meet consumer demand.