Motorola 2007 Annual Report Download - page 26

Item 1A: Risk Factors
We wish to caution the reader that the following important risk factors, and those risk factors described
elsewhere in this report or our other Securities and Exchange Commission filings, could cause our actual results
to differ materially from those stated in forward-looking statements contained in this document and elsewhere.
We operate in highly-competitive markets and our financial results will be affected if we are not able to compete
effectively.
The markets for our products are highly competitive with respect to, among other factors: pricing, product
features, product and service quality, and the time required to introduce new products and services. We are
constantly exposed to the risk that our competitors may implement new technologies before we do, or may offer
lower prices, additional products or services or other incentives that we cannot or will not offer. We can give no
assurances that we will be able to compete successfully against existing or future competitors.
Our success depends in part on our timely introduction of new products and technologies and our results can be
impacted by the effectiveness of our significant investments in new products and technologies.
The markets for our products are characterized by rapidly changing technologies, frequent new product
introductions, short product life cycles and evolving industry standards. Our success depends, in substantial part,
on the timely and successful introduction of new products and upgrades of current products to comply with
emerging industry standards and to address competing technological and product developments carried out by our
competitors. The research and development of new, technologically-advanced products is a complex and uncertain
process requiring high levels of innovation and investment, as well as the accurate anticipation of technological
and market trends. We may focus our resources on technologies that do not become widely accepted or are not
commercially viable. In addition, our products may contain defects or errors that are detected only after
deployment. If our products are not competitive or do not work properly, our business will suffer.
Our results are subject to risks related to our significant investment in developing and introducing new
products, such as: advanced wireless handsets; WiMAX; 4G technologies for wireless broadband networks;
products for transmission of telephony and high-speed data over hybrid fiber coaxial cable systems; integrated
digital radios; and integrated public safety systems. These risks include: (i) difficulties and delays in the
development, production, testing and marketing of products; (ii) customer acceptance of products; (iii) the
development of, approval and compliance with industry standards; (iv) the significant amount of resources we
must devote to the development of new technology; and (v) the ability to differentiate our products and compete
with other companies in the same markets.
Our success, in part, will be affected by our ability to successfully compete in the ever-evolving markets in
which we participate. We face intense competition in these markets from both established companies and new
entrants. Product life cycles can be short and new products are expensive to develop and bring to market.
Our evaluation of structural and strategic realignment alternatives for our businesses may have an adverse effect
on business operations and our assets.
In January 2008, we announced that we are evaluating alternatives for the structural and strategic realignment
of our businesses. This may include the separation of the Mobile Devices business from our other businesses. We
have not determined all structural and strategic alternatives that may be available to us, whether we will elect to
pursue any such strategic alternatives, or what impact any particular strategic alternative will have on our business
operations or stock price if pursued. There are various uncertainties and risks relating to our exploration of
structural and strategic alternatives that could have an adverse effect on our business operations or assets,
including: (i) exploration of structural and strategic alternatives may distract management and disrupt operations,
which could have a material adverse effect on our operating results; (ii) perceived uncertainties as to our future
direction may result in increased difficulties in recruiting and retaining employees, particularly highly qualified
employees; (iii) perceived uncertainties as to our future direction may have a negative impact on our relationships
with our customers, suppliers, vendors and partners and may result in the loss of business opportunities; (iv) the
process of exploring strategic alternatives may be time consuming and expensive and may result in the loss of
business opportunities; and (v) we may not be able to successfully achieve the benefits of any strategic alternative
undertaken by us.
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