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Motorola

Motorola (NYSE: MOT) manufactures and markets communication systems and services. Founded in 1928 in Chicago, it is currently headquartered in Schaumburg, Ill., under co-CEOs Gregory Brown and Dr. Sanjay Jha.

Company Description

If you've ever talked to someone else far away while you were on the move -- whether on foot, in a car, or, in far rarer instances, rocketing toward the moon in a space capsule -- chances are you have Motorola to thank. Though it's primarily known today for its mobile communication devices, including the two-way radios and cellular phones it helped pioneer, Motorola one spanned a much broader spectrum of the electronics market, including radios, televisions, and computer chips.

Brothers Paul and Joseph Galvan founded the Galvan Manufacturing Company in Chicago in 1928. Though they initially entered the market with battery eliminators, devices that converted battery-powered radios to run on household electrical current, they secured the company's future by subsequently developing the first popular and widely used car radio. Today's car radios are easily slotted into the dash by technicians, and just as swiftly removed by enterprising thieves. But the company's first model, completed in 1930, was a much more complex feat of engineering, with parts crammed into various locations throughout the car, including under the floor. The radio was dubbed the Motorola, combining "motor" with "Victrola," a then-popular brand of phonographs. Despite the ongoing Depression, it sold well enough to help the Galvans' company thrive.

In subsequent decades, the company invented or popularized a number of gadgets we now take for granted:

  • The two-way radio, including the huge handsets and backpack models you've probably seen in countless World War II movies.
  • The police radio.
  • The car phone, released in 1946.
  • The rectangular color TV tube.

In 1969, Motorola radios conveyed Neil Armstrong's first words from the moon. Four years later, the company unleashed perhaps its most influential invention yet -- a prototype of the first portable cellular phone. The company's first enormous, boxy, hilarious-in-hindsight cellular telephones finally found their way into the hands of high-powered business types in 1984. (To the company's credit, it would also introduce the StarTAC, predecessor to today's ever-tinier cell phones, in 1996.)

In 1986, the company also developed the Six Sigma management process, which would achieve greater fame in the halls of General Electric. Its chips also powered many of Apple's signature computers.

Unfortunately, Motorola took a huge gamble in the late '90s, and lost badly. It was the primary backer for Iridium, a company whose network of satellites enabled a truly global telephone network. But the project was massively expensive, the handsets bulky, and the service extremely costly. (If you've ever seen TV's Jack Bauer shouting urgently into an unusually large telephone with a huge, fat antenna, he's probably using an Iridium-based satellite phone.) Customers didn't adopt the Iridium in the numbers Motorola needed to avoid massive debts; the $6 billion project was eventually sold to private investors for a mere $25 million.

To foot the bill for Iridium's bellyflop, and make up for further downturns in its fortunes, Motorola had to get rid of many of its divisions in the early 2000s. It divested its government contracting and automotive systems arms, and spun off its ailing semiconductor business as Freescale in 2003. The new, leaner Motorola scored a hit in 2004 with its super-sleek RAZR handset, but couldn't match that success with subsequent models.

In 2008, the company announced plans to split itself into two sister companies, one making mobile handsets for consumers, and the other creating the technology to power cellular networks and other communications systems.

Divisions

Motorola currently operates three major divisions:

  • Enterprise Mobility Solutions provides voice and data networking tools for business and government, including radio systems, bar code scanners, and business-sized wireless networks.
  • Home & Networks Mobility builds set-top boxes and other infrastructure and devices for cable and phone companies, among other clients.
  • Mobile Devices makes various handsets and smart phones, all of which quietly hope they'll be the next RAZR.

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