Hang(Cindy) Bi

COMPANY RESEARCH – MOTOROLA, INC

Motorola is a Fortune 100 global communications leader that provides seamless mobility products and solutions across broadband, embedded systems and wireless networks. (“Seamless” here means Motorola’s products, services and applications enable telephony, data and video to be accessed across anywhere -- home, enterprise, or auto and anytime).

Industry: / Manufacturing, Telecommunication Equipment, Consumer Goods, Consumer Electronics
Revenues: / $36.8 Billion, up18% from $31.3billion in 2004. Sales increased in all four of our operating segments.
Employees: / 69000

Motorola is a corporation organized under the laws of the State of Delaware as the successor to an Illinois corporation organized in 1928. Motorola’s principal executive offices are located in Illinois. Motorola is known around the world for innovation and leadership in wireless, broadband and automotive communications.

2005 Change in Organizational Structure. Effective on January1, 2005, the Company reorganized its businesses and functions to align with the Company’s seamless mobility strategy. The Company was organized into four main business groups, focused on:

(1)Mobile Devices(net sales represented 58% of the Company’s consolidated net sales ‘05)

Designs, manufactures, sells and services wireless handsets, with integrated software and accessory products. The segment’s largest end customers (including sales through distributors) are Sprint Nextel, Cingular, China Mobile, América Móvil and T-Mobile. In 2005, purchases of iDEN® products by SprintNextel Corporation comprised approximately 13% of the segment’s net sales.

(2)Networks (net sales represented 17% of the Company’s consolidated net sales ‘05)

Designs, manufactures, sells, installs and services: (i)cellular infrastructure systems, including hardware and software, (ii)fiber-to-the-premise (“FTTP”) and fiber-to-the-node (“FTTN”) transmission systems supporting high-speed data, video and voice, and (iii)wireless broadband systems. In 2005, five customers represented approximately 56% of the segment’s net sales (SprintNextel; KDDI; China Mobile; Verizon; and China Unicom). Further, because contracts are long-term, the loss of a major customer would impact revenue and earnings over several quarters.

(3)Government and Enterprise Mobility Solutions (represented 18% of the Company’s consolidated net sales ‘05)

The leading provider of: (i)mission-critical wireless communications systems for government and public safety markets worldwide, (ii)business-critical wireless devices, networks and applications focused around mobile computers and the mobile office for world-class enterprise organizations, and (iii)electronics and telematics systems that enable automated roadside assistance, navigation and advanced safety features for automobile manufacturers worldwide. In 2005, the net sales to customers in North America represented 69% of the segment’s net sales.

(4)Connected Home Solutions (represented 8% of the Company’s consolidated net sales ‘05)

Designs, manufactures and sells a wide variety of broadband products. Within the home, the segment provides interactive digital set-top boxes and Internet gateways that provide access to entertainment and two-way communications services. The vast majority of the segment’s sales are in the U.S., where a small number of large cable television multiple system operators (“MSOs”) own a large portion of the cable systems and account for a significant portion of the total capital spending in the industry. Comcast Corporation accounted for approximately 31% of the segment’s net sales in 2005. The opportunity in this market segment is expected to continue to grow as carriers around the world expand to offer video services.

Motorola’s key support functions, including supply-chain operations, information technology, finance, human resources, legal, strategy and business development, marketing, quality and technology have been architected centrally and distributed throughout the Company. Motorola has several large customers, the loss of one or more of which could have a material adverse effect on the Company. Motorola’s largest end customers (including sales through distributors) are Sprint Nextel, Cingular, China Mobile, América Móvil and T-Mobile. Motorola sold approximately 12% of its products and services to Sprint Nextel in 2005.

News: 8/8/2006 Sprint Nextel Corp announced its plans to develop and deploy the first fourth generation (4G) nationwide broadband mobile network, working together with Intel, Motorola and Samsung. The plan intended to allow Sprint Nextel customers to experience a nationwide mobile data network that is designed to offer faster speeds, lower cost, and greater convenience and enhanced multimedia quality. Motorola is a provider of mobile broadband and WiMAX to consumers nationwide. Motorola has been Spring Nextel’s sole supplier of iDEN handsets and core iDEN network infrastructure equipment for over ten years. The Nationwide advanced wireless broadband network expected to cover 100 million people in 2008

Sources: i) Motorola’s Annual Report on Form 10-K for the fiscal year ended December31, 2005

ii) iii)