Motorola 2007 Annual Report Download - page 10

Principal Products and Services
Our wireless subscriber products include wireless handsets with related software and accessory products. We
also sell and license our intellectual property. We market our products worldwide to carriers and consumers
through direct sales, distributors, dealers, retailers and, in certain markets, through licensees.
Our Industry
The overall wireless handset industry remains strong. Total industry shipments of wireless handsets (also
referred to as industry “sell-in”) increased to approximately 1.14 billion units in 2007, an increase of
approximately 16% compared to 2006. Demand from new subscribers was strong in emerging markets, led by
India and China. Replacement sales in highly-penetrated markets were also strong due to generally favorable
economic conditions, as well as compelling new handset designs, attractive handset features and the increased roll-
out of high-speed data networks, all creating greater demand.
Industry forecasters predict that the wireless handset industry will continue to grow over the next several
years, although the annual rate of growth is expected to be in the 10% range as opposed to the approximately
20% average annual growth the industry experienced from 2003 through 2007. Continued growth is expected to
be driven primarily by demand from new subscribers in emerging markets and replacement sales from the current
subscriber base.
Our Strategy
Motorola seeks to be a leading supplier of wireless handsets and mobile experiences to customers globally. To
accomplish this objective, our strategy is focused on improving our product portfolio to meet consumer demands
and improving our financial performance. This includes transitioning to silicon and software platforms that enable
us to lower costs, get to market faster and offer richer consumer experiences.
We have structured our mobile device product portfolio and development into four primary product segments:
Mass Market, Feature, Multimedia and Productivity. Our strategy is to offer a broad array of products in each of
these product segments.
The Mass Market product segment focuses on voice-centric devices with targeted features. While this segment
is maturing in North America, Europe and parts of Asia, it is growing significantly in developing regions. To
address this market, we are expanding our handset offerings around our new W Series of handsets. These handsets
satisfy everyday communications needs, include targeted features and are offered at affordable price points across
all regions and in both CDMA and GSM technologies. The key to our success in the Mass Market product
segment is offering products at competitive price points.
The Feature product segment focuses on delivering iconic, fashionable phones with high-end features. During
2007, we refreshed our flagship RAZR franchise with the RAZR2, the luxurious RAZR2 V8, and a RAZR classic
with video playback and a digital audio processor music player. We are focused on building an enhanced portfolio
of Feature phone devices that deliver compelling 2G and 3G mobile experiences.
The Multimedia product segment is focused on the convergence of voice capabilities with multimedia
experiences on a single mobile device. In the recent past, many of our customers have purchased and used different
devices from multiple consumer electronics segments to meet their lifestyle needs. In addition to mobile phones,
they use devices such as cameras, mobile music and video players, mobile gaming devices and portable navigation
devices. Increasingly, these experiences will be delivered through compelling applications and services on a single
device. We are developing handsets designed to strengthen our Multimedia product offerings, such as the
MOTOROKR Z6 and the S9 headset, a 2008 mobile music offering. We are particularly focused on developing a
broader offering of 3G products for the Multimedia product segment.
The Productivity product segment is growing as workforces around the world continue to demand increasingly
robust wireless handsets and consumers want their email “on the go.” In 2007, we expanded our Q franchise
across all regions and major technologies with the launch of the GSM Q8 and UMTS Q9h. We are planning to
capitalize on new opportunities in this growing product segment.
Throughout each of these product segments, we have increased our focus in our accessories portfolio to
deliver complete mobile experiences and to complement the features and functionalities of the wireless handsets.
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