Motorola 2008 Annual Report Download - page 21

voice, data, and broadband systems continues, the segment may face additional competition from public
telecommunications carriers.
Within the commercial enterprise market, many firms are engaged in the manufacturing and marketing of
mobile computing devices, products in bar code reading equipment and wireless networks. Numerous companies,
including present manufacturers of scanners, lasers, optical instruments, microprocessors, wireless networks,
notebook computers, handheld devices and telephonic and other communication devices, have the technical
potential to compete with the business. Competitors such as Intermec, Honeywell and Cisco deliver products in
certain parts of the commercial enterprise market.
Payment Terms
Payment terms vary worldwide, depending on the arrangement. Generally, contract payment terms range from
30 to 45 days from the invoice date within North America and are typically limited to 90 days in regions outside
of North America. A portion of the contracts in the government and public safety market include implementation
milestones, such as delivery, installation and system acceptance, which generally take 30 to 180 days to complete.
Invoicing the customer is dependent on completion of the milestone.
We generally do not grant extended payment terms. As required for competitive reasons, we may provide
long-term financing in connection with equipment purchases. Financing may cover all or a portion of the purchase
price.
Regulatory Matters
The use of wireless voice, data and video communications systems requires radio spectrum, which is regulated
by governmental agencies throughout the world. In the U.S., the FCC and the National Telecommunications and
Information Administration (“NTIA”) regulate spectrum use by non-federal entities and federal entities,
respectively. Similarly, countries around the world have one or more regulatory bodies that define and implement
the rules for use of the radio spectrum, pursuant to their respective national laws and international coordination
under the International Telecommunications Union (“ITU”). Consequently, the business and results of this segment
could be affected by the rules and regulations adopted by the FCC, NTIA or regulatory agencies in other countries
from time to time. The availability of additional radio spectrum may provide new business opportunities.
Regulatory changes in current spectrum bands may also provide opportunities or may require modifications to
some of our products so they can continue to be manufactured and marketed.
The segment manufactures and markets products in spectrum bands already made available by regulatory
bodies. These include voice and data infrastructure, mobile radios and portable or handheld units. Our products
span the public safety, enterprise, commercial and consumer markets and operate both on licensed and unlicensed
spectrum. In addition, new spectrum bands and modified regulations provide possible opportunities for new
business.
As television transmission and reception technology transitions from analog to more efficient digital modes,
various countries around the world are examining, and in some cases already pursuing, the redevelopment of
portions of the television spectrum. In the U.S., pursuant to federal legislation, analog television stations must
cease operation in the broadcast television spectrum by June 12, 2009. As a result of this transition, 108 MHz of
spectrum historically used for broadcast television is being redeveloped for new uses (the so-called “digital
dividend” spectrum), including broadband and narrowband wireless communications. This soon-to-be available
spectrum can provide new opportunities for Motorola and for our competitors. Under rules adopted by the FCC,
this portion of the spectrum under redevelopment (the 700 MHz band) will support new commercial and public
safety communications systems. Licenses for the majority of this spectrum have already been issued and as of
February 2009, over 40 public safety customers are already implementing narrowband 700 MHz systems in areas
where television incumbency is not an issue. Additional agencies are expected to begin deploying systems once
broadcast television is cleared from the 700 MHz band in mid-2009. The FCC is also making provisions for a
700 MHz band nationwide public safety broadband network that may be built over the next 10-15 years. Canada
also released a consultation requesting industry input on making additional spectrum available for public safety use
in the 700 MHz band. Segments of the spectrum have been auctioned for commercial use and Motorola could see
new business opportunities as auction winners implement broadband systems on that spectrum. However, since
many analog television operations will continue transmitting in this spectrum until June 12, 2009, it is premature
for auction winners to deploy in most markets. This delay may temporarily delay opportunities for the Company.
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