Motorola, and the corporation names, corporation games thing
So on January 4, 2011, Motorola will complete its separation into two companies. The way it actually works is that what used to be Motorola will separate Motorola Mobility Holdings, or Motorola Mobility for short, from Motorola proper, and Motorola will then change its name to Motorola Solutions. So technically it looks more like Motorola jettisoned their phone business to concentrate on the much more stable and predictable vertical market offerings developed and sold via Motorola Solutions. From a stockholder’s perspective, they’ll get one share of Motorola Mobility for every eight shares of old Motorola stock. The old Motorola stock will then undergo a reverse 1-for-7 stock split so that seven shares of old Motorola stock becomes one share in Motorola with its new Motorola Solutions name (see how it works).
Sure reminds of the lines in that old Grace Slick We-Built-This-City song: “Someone always playing corporation games, who cares they’re always changing corporation names.”
While the spun off cellphone business will have about the same number of employees as the solutions business (both about 20,000), annual revenue of the cellphone side is expected to be US$11-12 billion and on the solutions side about 8-9 billion. However, the cellphone business is exceedingly unpredictable compared to the much more linear solutions side. For example, who’d have thought that cellphone world leader Nokia would completely miss the smartphone wave? Who could have predicted the iPhone? And wasn’t Motorola itself on top of the world with its RAZR (over 120 million sold), and then practically fell off the map when the follow-ups didn’t catch on? And who could have predicted that the Droid would catch on as it did. It’s a wild ride there in cellphones, feast or famine.
Things are much different on the solutions side. Everyone needs “solutions,” and solutions helped IBM and HP quietly not only remain relevant, but become bigger than ever despite diminished emphasis on hardware. IBM ditched its PC business (to Lenovo) and printer business (spinning off Lexmark), and while HP is huge in hardware, buying EDS (Electronic Data Systems) also made it one of the largest solutions providers, which now contribute a third of HP’s revenue. Compared to those two giants, each with revenues over US$100 billion, Motorola Solutions will be small, but the business model sure looks promising.
What is Motorola Solutions? Company officials have always struggled with communicating that clearly. In essence, they leverage established lines of two-way radios, network equipment, scanners, and handheld computers into solutions for just about any vertical market. The scanners and handheld computers, of course, come from Symbol, which Motorola acquired in 2007. In a sense, with the former Motorola now being Motorola Solutions, and Symbol being a large part of Motorola Solutions, it almost looks like Motorola merged into Symbol, though I am not sure what part of the Motorola Solutions revenue comes from Symbol and what part from the two-way radio and related equipment side. I am also not sure who packages and manages those solutions that rely on Symbol’s scanners and handhelds, and the radios, and whether Symbol will be just a hardware shop or be more involved in the solutions process.
Overall, one cannot help but wonder what Motorola had in mind with Symbol and its very considerable brand equity. After the acquisition there were a good two years where some Symbol products continued to have the Symbol name and logo before gradually getting the corporate Motorola logo. In the new Motorola Solutions, Symbol remains by far the most prominent brand, and I really do wonder what it all looks like from the inside.
One almost wonders why they didn’t just go back to the Symbol name. There’s precedence for such a move: Motorola Solution’s biggest competitor in mobile hardware is Intermec, and Intermec once was just a subsidiary of Unova, and not a major one at that (though they swallowed Norand, just as Symbol swallowed Telxon). Yet, under the dynamic leadership of former CEO Larry Brady, Intermec established itself as a successful and driving force in the mobile/wireless industrial market, to the extent where in 2006, Unova changed its name to Intermec.
Oh, and then there is the weird thing with the operating systems: Motorola Mobility (strange choice of name, actually, considering that the actual mobile computers went with the other side) totally depends on Google’s Android now, whereas all of Symbol’s handhelds use Windows Mobile. Yet, given Windows Mobile’s rather tenuous position and uncertain outlook, Symbol/Motorola Solutions simply has to have much more than a passing interest in Android itself. But the Android expertise is now in the other Motorola company. Go figure. And that’s before the looming possibility that the Oracle/Google lawsuit over Android may put a monkey wrench in the works, or that Samsung or HTC take over the Android phone business.
Yes, they’re always changing corporation names, and at times it’s hard not to see it all as corporation games. In our fast-moving world where companies grow and buy each other, those games and struggles have become the norm, and sometimes one really wonders if all the overhead was worth it.
I was reminded of that while following the course of action of another mobile computing conglomerate over the past three years or so. What happened there was that Roper Industries, a very diversified almost US$2 billion company added three mobile computer companies to its roster, those being long-established Canadian DAP Technologies, start-up Black Diamond, and JLT Mobile Computers. The three companies were put together under the “Roper Mobile Technology” name, with DAP, Black Diamond, and Duros (the former JLT models) being its brands. Roper Mobile Technology was then renamed to RMT, Inc, with a nice and modern logo. That seemed to make much sense, but then the whole effort was shelved, with DAP Technologies absorbing the Duros lineup and renaming everything, retiring both their old “MicroFlex” brand name as well as the impressive-sounding “Duros” in the process (and also the somewhat contrived-sounding “Kinysis” name). Black Diamond is once again on its own as a subsidiary of Roper Industries. This probably all makes sense, but from the outside it looks confusing and like a few year’s worth of lost opportunity to establish a force in the mobile/rugged market.
No one has a crystal ball, and every decision is (hopefully) the result of careful consideration, but sometimes it’s hard to figure out why things are being done a certain way when there appear to have been much more logical courses of action.