Motorola 2009 Annual Report Download - page 46

38 MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During the year, we enhanced our product portfolio with the introduction of several innovative products.
With our APX family of products, we are the only manufacturer to offer interoperable mobile and
portable multi-band radios and related infrastructure equipment. We continued our market leadership in
TETRA products outside the U.S., and reached an industry leading milestone by shipping our one
millionth TETRA subscriber radio. We also enhanced our leading rugged mobile computing portfolio with
the launch of the MC9500, MC3100 and MC55 product lines. In the advanced data capture portfolio, we
announced the MT2000 series of rugged, hand-held bar code scanners that incorporate the benefits of a
mobile computer, an industry first. These products have all received very positive customer response.
Looking Forward
During 2009, challenging economic conditions around the world impacted many of our customers and
consumers, resulting in reduced demand in many of our businesses. In the latter half of 2009, although sales
levels in our businesses remained well below 2008 levels, there were signs of stabilization in the markets that we
serve. In 2010, we expect demand to increase in the market for handsets, particularly smartphones, as well as
certain markets for the Enterprise Mobility Solutions business. Demand in other markets, including the markets
for the Home and Networks Mobility business, are expected to have little to no growth, or may even contract.
As worldwide economic conditions, financial markets and overall business conditions improve, we will have
opportunities to extend our brand, to sell our products and services and to pursue profitable growth.
For the longer term, we believe the fundamental trends toward convergence of mobility, computing and
communications, the need for faster wireless broadband speeds, and evolution of the mobile Internet will
continue. We are focused on designing and delivering innovative wired and wireless communications products and
systems, unique mobile experiences and powerful networks, as well as complementary support services. We
believe this positions us to provide customers and consumers with differentiated products and solutions for when,
where and how they connect to people, information and entertainment.
In our Mobile Devices business, we expect the overall global handset market to remain intensely competitive.
We expect an increase in total industry handset demand in 2010 compared to 2009, particularly in smartphones.
Our strategy is focused on enhancing our smartphone portfolio, optimizing our cost structure and strengthening
our position in priority markets. Our transition to a more competitive portfolio began in the fourth quarter of
2009 with the introduction of new smartphones based on the Android operating system and MOTOBLURTM, our
proprietary applications and services suite. In 2010, a significant number of our new devices will be smartphones
as we expand our portfolio across a broader set of price points and address a wider set of customers. Our initial
market focus includes North America, parts of Asia, including China, and Latin America. Based upon our
performance in these markets, we will look to expand our presence in other geographic regions, including
Western Europe. We will continue to deliver a feature phone portfolio, albeit more limited than in the past, by
leveraging our ODM partnerships to meet carrier and retail customer requirements and extend our brand. Overall
in 2010, feature phone sales including IDEN, are expected to be lower. We also are continuing our focus on our
accessories portfolio to deliver complete mobile experiences.
Cost-reduction initiatives implemented in 2009 allowed the Mobile Devices business to enter 2010 with a
more competitive cost structure. In 2010, we will further optimize our cost structure as we reduce our investment
in certain areas and reinvest in smartphone innovation, as well as MOTOBLUR. Collectively, these actions are
designed to accelerate our speed to market and to allow us to offer richer consumer experiences, build our brand
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. Due to economic conditions in the U.S., particularly related to consumer spending and the housing
market, demand slowed in 2009 in the markets served by our home business. While the longer term fundamentals
for the home business remain intact, we expect the soft demand environment to continue in the near term. As
U.S. economic conditions improve, and as operators’ need for more bandwidth and upgraded infrastructure for
the provisioning of advanced services to consumers increases, demand trends for our home business are expected
to improve. We will leverage our market leading position in digital entertainment devices and video delivery
systems and prioritize our research and development efforts to ensure that we are well positioned for growth
when demand levels recover.
In our networks business, we are investing in next-generation wireless broadband technologies, including
WiMAX and LTE, while continuing to optimize our 2G and 3G business. In WiMAX, we are building upon a
strong portfolio of customers and leveraging our market leadership. In LTE, we will continue to evolve our
competitive radio access network solution (RAN) while focusing on leading wireless network customers around