Motorola 2004 Annual Report Download - page 21

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Competition
Demand for the products of ACES is linked to automobile sales in the U.S. and other countries and the level
of electronic content per vehicle. Demand for ESG products is strongly linked to the sales of other Motorola
businesses, particularly the sales of our wireless handset business, the group's largest customer. Demand for ECCG
products is linked to sales of telecommunications, manufacturing, and other infrastructure systems in the U.S. and
other countries. The segment experiences competition from numerous global competitors, including automobile
manufacturers' aÇliated electronic control suppliers.
ACES is the leader for embedded telematics systems and products, as well as a leader for pressure sensor
products; key competitors include Delphi and Visteon. ESG is one of the largest providers of portable energy
storage products and systems; key competitors include Sony, Panasonic, and Sanyo. ECCG is a leader in VME
technology (the industry's Ñrst widely-adopted embedded computing standard) and the leading CompactPCI
Systems supplier; key competitors include Radisys and Kontron.
Competitive factors in the sale of the segment's products include: price; product quality, performance and
delivery; supply integrity; quality reputation; responsiveness; and design and manufacturing technology.
Payment Terms
Generally, contract payment terms range from 30 to 60 days.
Backlog
The segment's backlog was $424 million at December 31, 2004, compared to $347 million at December 31,
2003. The 2004 backlog is believed to be generally Ñrm and approximately 100% of that amount is expected to be
recognized as revenue during 2005. This forward looking estimate of the Ñrmness of such orders is subject to future
events that may cause the amount recognized to change.
Intellectual Property Matters
Patent protection is important to the segment's business. Reference is made to the material under the heading
""Other Information'' for information relating to patents and trademarks and research and development activities
with respect to this segment.
Inventory, Raw Materials, Right of Return and Seasonality
The segment does not carry signiÑcant amounts of inventory.
All materials used by our operations are readily available at this time. We use electricity and gas in our
operations, which are currently adequate in supply. Labor is generally available in reasonable proximity to the
segment's manufacturing facilities. However, diÇculties in obtaining any of the aforementioned items could aÅect
our results.
In certain circumstances generally pursuant to warranties, we permit customers to return products. We believe
that the return policies in all businesses conform to standard industry practices. Our business has not experienced
signiÑcant seasonal buying patterns.
Our Facilities/Manufacturing
Our headquarters are located in Deer Park, Illinois. We also have major facilities located in Tempe, Arizona;
Lawrenceville, Georgia; Farmington Hills, Michigan; Elma, New York; Seguin, Texas; Nogales, Mexico; Tianjin,
China; Angers, France; Munich, Germany; and Penang, Malaysia. Most of our ACES products are manufactured in
our Seguin, Texas and Nogales, Mexico facilities. We manufacture all of our ESG products in Asia, primarily in
two of our facilities in China and Malaysia. The manufacture of ECCG products has been transferred to contract
manufacturers and our facility in Nogales, Mexico.