Motorola 2008 Annual Report Download - page 49

the industry leading APX family of products, including mobile and portable radios and infrastructure, and
received very positive customer response.
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 further strengthened our
position in the commercial enterprise marketplace. The enhanced mobile computing offerings included the
MC75 product lines, which had very successful product launches and were well received in all regions. The
portfolio was also strengthened by the acquisition of AirDefense, a leading provider of premium software
security applications for wireless LAN networks.
Looking Forward
Adverse economic conditions around the world have impacted many customers and consumers and resulted in
slowing demand for many of our businesses. However, the longer-term, fundamental trend regarding the
dissolution of boundaries between the home, work and mobility continues to evolve. We believe our focus on
designing and delivering differentiated wireless communications products, unique experiences and powerful
networks, as well as complementary support services, will enable consumers to have a broader choice of when,
where and how they connect to people, information, and entertainment. While many markets we serve will have
little to no growth, or even contraction in 2009, there still remain large numbers of businesses and consumers
around the world who have yet to experience the benefits of converged wireless communications, mobility, and the
Internet. As economies, financial markets and business conditions improve, this will present new opportunities to
extend our brand, to market our products and services, and to pursue profitable growth.
In 2008, the Company announced that it was pursuing the creation of two independent, publicly traded
companies: one comprised of our Mobile Devices business, and the other comprised of our Home and Networks
Mobility and Enterprise Mobility Solutions businesses (collectively, referred to as “Broadband Mobility Solutions
businesses”). The Company also indicated that it was targeting the third quarter of 2009 for the separation to occur.
However, due to the weakened global economic environment and dislocation in the financial markets, as well as
changes underway in the Mobile Devices business, the Company is no longer targeting the third quarter of 2009 to
complete the separation. The Company has made progress on various elements of its separation plan. Management
and the Board of Directors remain committed to separation in as expeditious a manner as possible and continue to
believe this is the best path for the Company. Goldman Sachs & Co., the Company’s primary financial advisor on
this matter, supports this direction. The Board continues to work with its financial advisors on potential alternative
separation structures. The Board further believes that in working with its financial advisors the Company will be able
to find a structure which will permit separation in a way that maximizes value for all shareholders.
We expect the overall global handset market to remain intensely competitive with lower total demand due to the
continued adverse economic environment around the world. Our strategy is focused on simplifying product
platforms, enhancing our product portfolio in the mid- and high-tier, reducing cost structure and strengthening our
position in priority markets. To this end, in 2008, we have reduced the number of product platforms that we
support, increasing our emphasis on 3G and smartphone devices while maintaining our focus on CDMA and iDEN
technologies. We expect our transition to a more competitive portfolio will show progress by the fourth quarter 2009
and continue in 2010. In addition to our portfolio streamlining and enhancement efforts, over the next year we will
also increase our focus in priority markets. These markets will include North America, Latin America and parts of
Asia, including China. Along with our mobile handset initiatives, we have also increased focus on our accessories
portfolio to deliver complete mobile experiences and to complement our handset features and functionalities. In
addition to our efforts to dramatically improve the product portfolio, we have implemented cost-reduction initiatives
to ensure that we have a more competitive cost structure. These actions will accelerate our speed to market with new
products, allow us to offer richer consumer experiences and improve our financial performance.
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 build on our market leading position in digital entertainment devices and video delivery systems
to capitalize on demand for high definition TV, personalized video services, broadband connectivity and higher
speed. We will also deliver broadband access systems and gateway products for video, voice and data services.
However, due to the impact that economic conditions, especially in the U.S., may have on demand for services
provided by some of our customers, demand is likely to slow in 2009 in the home business. We will continue to
make investments to position ourselves as a leading infrastructure provider of next-generation wireless
technologies. As more networks are commercialized, we expect an increase in WiMAX sales opportunities
beginning in 2009. We expect the overall 2G and 3G wireless infrastructure market to decline compared to 2008
and to remain highly competitive. The Home and Networks Mobility business will continue to optimize its cost
structure and prioritize investments in innovation and future growth opportunities. This will position the business
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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS