Motorola 2007 Annual Report Download - page 47

The business implemented improved processes and discipline around product pricing, rationalized
elements of its distribution network, reduced channel inventory and improved its cash conversion cycle in
the second half of 2007 as compared to the first half of 2007.
•In Our Home and Networks Mobility Business: The Home and Networks Mobility business remained the
world’s leading provider of digital entertainment devices. Motorola shipped over 15 million digital
entertainment devices during the year, with nearly one-third of these shipments being HD/DVR capable. In
2007, Motorola shipped over 11 million modems and achieved the milestone of shipping its 50 millionth
cable/voice modem. Sales in the home business grew by 27% in the year, and included significant business
growth outside of the United States.
The business expanded its core portfolio by completing five significant acquisitions, including: (i)
Netopia, Inc., a broadband equipment provider for DSL customers, which allows for phone, TV and fast
Internet connections, (ii) Tut Systems, Inc., a leading developer of edge routing and video encoders, (iii)
Modulus Video, Inc., a provider of MPEG-4 Advanced Coding compression systems designed for delivery of
high-value video content in IP set-top devices for the digital video, broadcast and satellite marketplaces, (iv)
Terayon Communication Systems, Inc., a provider of real-time digital video networking applications to
cable, satellite and telecommunication service providers worldwide, and (v) Leapstone Systems, Inc., a
provider of intelligent multimedia service delivery and content management solutions to networks operators.
With these acquisitions, Motorola improved its position with global operators by enhancing its capabilities
in end-to-end video solutions.
Motorola also continued its investments in and focus on WiMAX, a next-generation wireless
broadband technology based on the IEEE standard 802.16e. At the end of 2007, the business had won
several commercial WiMAX contracts and was participating in over 40 WiMAX trials globally.
The business also had challenges during the year, as the GSM infrastructure market faced continuing
pricing pressures and sales of iDEN infrastructure declined compared to 2006. Despite these and other
challenges facing the wireless infrastructure industry, the wireless networks business remained profitable.
Finally, the business concluded the sale of its embedded communications computing business to Emerson for
$346 million, reflecting its continuing efforts to focus on its core businesses.
•In our Enterprise Mobility Solutions Business: In 2007, the Enterprise Mobility Solutions business
delivered solid results in a number of markets, largely due to the acquisition of Symbol Technologies, Inc. in
January 2007, and strong government and public safety sales in North America. The business continued to
maintain a leading market share position in a highly competitive market and also showed strong growth
outside of the United States.
Within the government and public safety business, sales continued to grow worldwide as demand for
integrated, interoperable public safety communications increased. As new and better spectrum utilization
evolves, demand and sales have increased for high-speed data applications, such as video surveillance and
other data-based products. In addition to its continued success in the United States, our largest market, the
business was awarded several international contracts for significant country-wide system solutions,
specifically in Europe. The new MOTOTRBO product line was also successfully launched and received very
positive customer acceptance in all geographies.
During the year, the commercial enterprise business enhanced its product portfolio by launching several
new mobile computing, wireless computing and advanced data capture products that put it in a strong
position in the commercial enterprise marketplace for the future. The enhanced mobile computing offerings
included the MC70 and the rugged MC9090 product lines which had very successful product launches and
were well received in all regions.
Looking Forward
The boundaries between the home, work and mobility continue to dissolve. We believe our focus on designing
and delivering differentiated products, unique experiences and powerful networks, along with a full compliment of
support services, will enable consumers to have a broader choice of when, where and how they connect to the
people, information, and entertainment that they want and need. Vast segments of the world’s population, many of
whom have yet to experience wireless communications or connect to the Internet, present new opportunities to
extend our brand and market our products and services.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS