<p>They testify to the pride in innovation at Motorola, a luminary of American business that has survived corporate crises and enormous technological change.<br /><br />Motorola Mobility Chief Executive Sanjay Jha has made significant changes since taking command in 2008. But the company has never grappled with something like this: a murky future governed by Google, a powerful master with unclear intentions. <br /><br />In announcing its planned $12.5 billion purchase of Motorola Mobility last week, Google emphasised its interest in the company’s rich trove of 17,000 patents. That portfolio would allow Google to defend itself against foes like Apple and Microsoft in the legal arena, where billions of dollars in patent licensing fees can be indirectly negotiated through lawsuits and countersuits. But while industry analysts and insiders say the rationale makes sense, they also say it leaves Motorola in an unusual position. <br /><br />Heightening the uncertainty is that the companies involved are in some ways as different as two technology companies can be. Google makes Internet services and software, thrives on high profit margins and distributes its product using giant data centres. <br /><br />Motorola makes hardware and moves its products on trucks and airplanes and through brick-and-mortar stores. Some hope the cultures will fuse and lead Motorola to a future as storied as its past. Martin Cooper, 82, who worked at Motorola for 30 years and developed the first hand-held cellphones there, said he hoped great things would come from combining Google’s momentum and confidence with Motorola’s tradition of excellence in radio technology. “The combination might make Motorola successful — again,” he said.<br /><br />At the least, industry analysts said Motorola almost certainly would become a laboratory for Google to seek to perfect Android, its mobile phone software, in concert with newly acquired hardware engineers. Others say Google may wind up giving financial backing to Motorola to help it revive its flagging fortunes in Europe and Asia. But if it appears to be getting too cozy with Motorola, Google risks upsetting other mobile phone makers like HTC and Samsung, who build some of the most popular smartphones and tablets running on Android. <br /><br />Google has said it will allow Motorola to run independently. But some analysts and investors think Google could markedly pare back or sell big parts of Motorola that create conflicts with partners or are not central to its goals. And that makes for uncertain times for the 19,000 employees at Motorola Mobility in Libertyville, a northern suburb of Chicago, and around the world. <br /><br />Financial doom<br />But in recent years, after Razr’s popularity faded, Motorola flirted with financial doom. It was only in the last few quarters that it surged back under the leadership of Sanjay Jha, a former executive at Qualcomm, who joined Motorola in 2008 when it was in danger of missing the rise of smartphone. He made significant changes, cutting thousands of employees and splitting the business in two: Motorola Solutions, which sells equipment to businesses, and Motorola Mobility, which handles consumer products like phones and set-top boxes. <br /><br />Motorola Mobility scaled back distribution in Europe and Asia, focusing its efforts on North America, Latin America and China. It emphasised fewer phone models and hitched its fortunes to Google’s Android software. <br /><br />In the company’s second quarter this year, it reported revenue of $3.34 billion and a profit of $26 million. That was up from revenue of $2.6 billion and a loss of $87 million for the period a year earlier. And the company shipped 11 million devices in the quarter, up from 8.3 million in the period a year earlier. Most of the increase came from smartphones — to 4.4 million, from 2.7 million a year earlier. <br /><br />The company has been producing products that dazzle gadget fans — no easy feat when taking on the iPhone. During Consumer Electronics Show in Las Vegas in January, Jha wowed audiences with the Motorola Xoom, a tablet computer than many considered to be the first real contender to Apple’s iPad. <br /><br />But the shipment numbers still pale in comparison to, say, the second quarter of 2006, when Razr sales were soaring. Motorola shipped 51.9 million of them that quarter. That was just before the phone’s price and popularity began to slip, dragging Motorola’s fortunes down with it. In announcing the deal, Larry Page, Google Chief Executive, said the two companies would “create amazing user experiences that supercharge the entire Android ecosystem.” <br /><br />Kevin Smithen, an analyst at Macquarie Capital, said Google might eventually sell off the phone and set-top businesses. Motorola would be “pared down if Google goes in that direction,” he said. But others say Google has the chance to help Motorola grow. <br /></p>
<p>They testify to the pride in innovation at Motorola, a luminary of American business that has survived corporate crises and enormous technological change.<br /><br />Motorola Mobility Chief Executive Sanjay Jha has made significant changes since taking command in 2008. But the company has never grappled with something like this: a murky future governed by Google, a powerful master with unclear intentions. <br /><br />In announcing its planned $12.5 billion purchase of Motorola Mobility last week, Google emphasised its interest in the company’s rich trove of 17,000 patents. That portfolio would allow Google to defend itself against foes like Apple and Microsoft in the legal arena, where billions of dollars in patent licensing fees can be indirectly negotiated through lawsuits and countersuits. But while industry analysts and insiders say the rationale makes sense, they also say it leaves Motorola in an unusual position. <br /><br />Heightening the uncertainty is that the companies involved are in some ways as different as two technology companies can be. Google makes Internet services and software, thrives on high profit margins and distributes its product using giant data centres. <br /><br />Motorola makes hardware and moves its products on trucks and airplanes and through brick-and-mortar stores. Some hope the cultures will fuse and lead Motorola to a future as storied as its past. Martin Cooper, 82, who worked at Motorola for 30 years and developed the first hand-held cellphones there, said he hoped great things would come from combining Google’s momentum and confidence with Motorola’s tradition of excellence in radio technology. “The combination might make Motorola successful — again,” he said.<br /><br />At the least, industry analysts said Motorola almost certainly would become a laboratory for Google to seek to perfect Android, its mobile phone software, in concert with newly acquired hardware engineers. Others say Google may wind up giving financial backing to Motorola to help it revive its flagging fortunes in Europe and Asia. But if it appears to be getting too cozy with Motorola, Google risks upsetting other mobile phone makers like HTC and Samsung, who build some of the most popular smartphones and tablets running on Android. <br /><br />Google has said it will allow Motorola to run independently. But some analysts and investors think Google could markedly pare back or sell big parts of Motorola that create conflicts with partners or are not central to its goals. And that makes for uncertain times for the 19,000 employees at Motorola Mobility in Libertyville, a northern suburb of Chicago, and around the world. <br /><br />Financial doom<br />But in recent years, after Razr’s popularity faded, Motorola flirted with financial doom. It was only in the last few quarters that it surged back under the leadership of Sanjay Jha, a former executive at Qualcomm, who joined Motorola in 2008 when it was in danger of missing the rise of smartphone. He made significant changes, cutting thousands of employees and splitting the business in two: Motorola Solutions, which sells equipment to businesses, and Motorola Mobility, which handles consumer products like phones and set-top boxes. <br /><br />Motorola Mobility scaled back distribution in Europe and Asia, focusing its efforts on North America, Latin America and China. It emphasised fewer phone models and hitched its fortunes to Google’s Android software. <br /><br />In the company’s second quarter this year, it reported revenue of $3.34 billion and a profit of $26 million. That was up from revenue of $2.6 billion and a loss of $87 million for the period a year earlier. And the company shipped 11 million devices in the quarter, up from 8.3 million in the period a year earlier. Most of the increase came from smartphones — to 4.4 million, from 2.7 million a year earlier. <br /><br />The company has been producing products that dazzle gadget fans — no easy feat when taking on the iPhone. During Consumer Electronics Show in Las Vegas in January, Jha wowed audiences with the Motorola Xoom, a tablet computer than many considered to be the first real contender to Apple’s iPad. <br /><br />But the shipment numbers still pale in comparison to, say, the second quarter of 2006, when Razr sales were soaring. Motorola shipped 51.9 million of them that quarter. That was just before the phone’s price and popularity began to slip, dragging Motorola’s fortunes down with it. In announcing the deal, Larry Page, Google Chief Executive, said the two companies would “create amazing user experiences that supercharge the entire Android ecosystem.” <br /><br />Kevin Smithen, an analyst at Macquarie Capital, said Google might eventually sell off the phone and set-top businesses. Motorola would be “pared down if Google goes in that direction,” he said. But others say Google has the chance to help Motorola grow. <br /></p>
