Motorola 2007 Annual Report Download - page 48

With a renewed emphasis on efficiency and time-to-market, we are investing in the future of our businesses.
Our research and development investment priorities include: next-generation wireless products, applications, and
services for enterprise markets; advanced technologies and applications for government and public safety markets;
and next-generation wireless handsets with application services. These investments, together with the acquisitions
of the past few years, are designed to foster continued innovation and profitable growth.
In 2007, our Home and Networks Mobility and Enterprise Mobility Solutions businesses delivered solid
results and finished with strong momentum. However, our Mobile Devices business faced significant challenges in
2007. We remain committed to executing on our strategic plans and pursuing opportunities for profitability
improvement across all of our businesses with continued dedication to our customers, quality and innovation.
In our Mobile Devices business, the overall global market remains strong and the environment remains
intensely competitive. Our primary focus is on driving a meaningful enhancement of our product portfolio. To this
end, we are optimizing our use of silicon providers and improving our software platforms to ensure that we can
deliver the most desirable set of experiences to wireless handset consumers. Our portfolio enhancement objectives
include a broad array of cost-effective products at multiple price points in each of our four product segments:
Mass Market, Feature, Multimedia and Productivity. We expect our products to continue to demonstrate unique
design and innovative features and function around experiences including, for example, messaging, music, imaging,
video, audio and touch. We expect the transition to having more devices featuring improved software platforms
and silicon designs will show progress by the end of this year and continue in 2009. In applications and services,
we continue to work with third parties to develop an ecosystem and service delivery platform that will deliver rich
experiences to consumers. In addition to our efforts to dramatically improve the portfolio, we are pursuing cost-
reduction initiatives to ensure that we have the optimal cost structure for the business going forward. We are also
evaluating the structural and strategic realignment of our business to better equip the Mobile Devices business to
recapture global market leadership and enhance shareholder value.
In our Home and Networks Mobility business, we are focused on delivering personalized media experiences to
consumers at home and on-the-go and enabling service providers to operate their networks more efficiently and
profitably. We will leverage our market leading position in digital entertainment devices. In addition, numerous
recent acquisitions have expanded our leadership position in broadband products and services for video, voice and
data. These acquisitions enable us to continue capitalizing on strong underlying demand for high definition and
video-on-demand services, as well as the convergence of services and applications across delivery platforms. We
will continue to make investments to position ourselves as a leading infrastructure provider of next-generation
wireless technologies. We expect the WiMAX market to begin to materialize in 2008 as the first networks are
commercialized. More significant sales opportunities for WiMAX are anticipated beyond 2008. For our wireless
networks business, we expect the environment to remain highly competitive and challenging. By continuing to
deliver end-to-end solutions that enable delivery of next-generation products and services and allocating resources
to investment priorities, our Home and Networks Mobility segment is poised to grow profitably in emerging
technologies, including video and wireless broadband, and maintain profitability in mature technologies.
In our Enterprise Mobility Solutions business, our key objective is profitable growth in enterprise markets
around the world. We will leverage our leadership position in mission-critical communications solutions and
develop next-generation products and solutions for our government and public safety customers around the world.
Anchored by the 2007 acquisition of Symbol Technologies, Inc., we have a very strong presence in the commercial
enterprise market, including retail, transportation, utility, manufacturing, healthcare and other commercial
customers. Our business-critical products and solutions allow our customers to reduce cost, increase worker
mobility and productivity, and enhance their customers’ experiences. We believe that our comprehensive portfolio
of enterprise products and solutions, leadership positions in government and public safety and commercial
enterprise markets, global network of channel partners, and distributors and solid market growth make our
Enterprise Mobility Solutions segment well positioned for continued success.
Although the Company implemented a number of actions last year to reduce cost, including workforce
reductions, prioritization of investments, spending controls, reduced general and administrative expenses and site
rationalization, further cost savings actions are necessary to improve profitability. The Company has determined
that additional cost-reduction actions will be taken in certain areas, including the Mobile Devices business and
across various corporate general and administrative functions.
The improvement in cash conversion cycle continues to be a major focus of the company. Building upon the
improvements made during 2007, we believe we can further reduce the company’s cash conversion cycle in 2008,
resulting in improved cash flow from operations.
40 MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS