ROSEMONT, Ill.-Though much pent-up interest was focused on Motorola’s handset announcements, company execs talk about operations, supply chain, finances, product roadmap and whether Motorola could sustain its recent robust performance-in sum, both the “vision thing” and the nitty-gritty.
CEO Ed Zander strode the stage, ignoring his allotted time, and talked at length about three elements essential to corporate success: vision, focus and execution. Motorola had done these things in reverse order, he said, beginning with execution in its turnaround in 2004, focus in 2005 and, finally, this year developing a compelling vision for the company’s reason-to-be, internal culture and world-beating direction. The company’s elusive mantra-“seamless mobility”-means “anything, anywhere,” which will be achieved by network-agnostic devices and services based on Internet Protocol. Motorola is focused on the hottest-selling consumer device in the world-the installed base for wireless handsets is 2 billion, vs. 1.5 billion televisions and 820 million personal computers-and thus is focused on a technology that will carry it to new heights, Zander said. In fact, he said, its leadership position in design and focus on handsets would grow Motorola’s other divisions-networks and enterprise, and connected home.
The company has shed businesses such as automotive and semiconductors that don’t directly relate to its core competencies and made a series of niche acquisitions aimed at bolstering its intellectual property rights portfolio and human capital. Zander emphasized that companies that can own or control their own IPR will control their own future-a Motorola goal that also directly dug at Nokia Corp.’s current impasse with Qualcomm Inc. over IPR cross-licensing.
“Does that company in San Diego own all the IPR?” Zander asked. “Hell no!”
Summing up, Zander exclaimed: “Motorola is the fastest-growing, high-tech, high-market cap company in the United States.”
Zander was followed to the stage by Dave Devonshire, his chief financial officer, who addressed the company’s financial fundamentals, and by Stu Reed, executive vice president for integrated supply chain, who explained how the company had overcome past issues in his area “while moving uphill at 170 miles per hour,” in part by cutting its number of suppliers until 90 percent of its spend is placed with only 150 suppliers. Reed also threw out a few buzzwords that reflected the new, multinational, corporate playing field, such as “brutal, concise execution,” and “maniacal focus”-no doubt intended to communicate that, while Zander and Ron Garriques, president of the mobile phones business, occasionally indulged in whimsical humor, the business of supply chain was grimly efficient.
Padmasree Warrior, Motorola’s chief technology officer, also talked the talk, contrasting the old wireless view of delivering bits through a pipe to the new mantra of delivering experiences, whether on the go or at home. She reviewed Motorola’s IPR holdings relative to its view of the technology roadmap ahead, particularly in 4G. Don Moloney, president of the company’s connected home business, sketched a sense of the company’s concept as a video showed family members forwarding content to each other in what might be described as virtual Frisbee.
Garriques, architect of much of Motorola’s booming fortunes, spoke last and acknowledged that his job was “instilling confidence in you” that the company could sustain its momentum. He then announced the Motofone, an upgraded, entry-level device with “aspirational” features that had been lacking in earlier Motorola efforts in India and China, where Motorola still trails Nokia. He crowed that that very day Motorola had cut a deal for 500,000 units upon launch. The audience erupted in applause.
“You can’t be a niche player in wireless technology,” he proclaimed. “You can’t ignore CDMA.” (Sha-zam! against Nokia.) “You can’t ignore the low-end.” (Ka-boom! on “Same-sung,” as one slide had it.)
While Motorola’s new phones run on Motorola-offshoot Freescale Semiconductor Inc.’s chips, his firm would go with whichever vendor offered best-in-class technology, Garriques continued. “There’s no religion here.”
Motorola plans to pursue the mass, emerging markets to build brand with its Scpl family of handsets, due out next year, and establish a clientele that will migrate up the handset tiers to higher margin devices. (The company is opening 60 retail stores in China in 60 days.) It will make phones in every form factor-swivels will arrive next year. Motorola will pursue an IPR strategy that will enable it to create a substantial IPR licensing royalty play, much like Qualcomm’s current business model. And in terms of brand and business model strategy, Motorola will maintain a parallel track to the current, carrier-centric model that rules in the United States.
No one on stage appeared to pause for air, though audience members could be forgiven for drawing deep breaths after a nine-hour day of facts and spin. At the end of a grueling day, it seemed as if Motorola executives had gotten their points across. Analysts had begun filing investor notes. Most were positive.
