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Motorola Co-CEO Brown to build new identity with solutions ops

13 ноября 2010

Greg Brown will have a difficult task once Motorola Inc. transforms itself into two new companies: ensuring the iconic name isn't just for cellphones.

For the past few years, the businesses under Motorola co-Chief Executive Brown--which include supplying businesses and governments with public radio systems, bar-code scanners and mobile-computing devices--have kept the company afloat as its more high-profile cellphone business wavered. But for all of Brown's successes, the more consumer-friendly side of the company continued to monopolize the attention.

"Obviously, we're not as well known," Brown said in an interview with Dow Jones Newswires.

Motorola is a few months away from a radical transformation. It is poised to shed its networks to Nokia Siemens Networks. Early next year, it will complete the separation that gives Brown control over Motorola Solutions. Co-CEO Sanjay Jha will run the second company, Motorola Mobility, which consists of mobile devices and the home entertainment businesses.

With the change, Brown gets a chance to commandeer the spotlight. He'll get his first shot when he provides the details of his plan for Motorola Solutions financial analyst event on Monday.

Motorola Solutions will be a business that generates more than $8 billion in revenue and employs 20,000 employees, Brown said. To build its brand, the company plans to build a campaign around focusing on the "critical moments that matter," playing up the role of its equipment in supporting first-responders during a catastrophe or tracking critical packages around the world.

Motorola ended the third quarter with roughly $9 billion in cash and short-term investments. Following the split, Motorola Mobility gets $3.5 billion of the stockpile. Motorola Solutions gets much of the balance, but also inherits the debt and pension obligation. Brown said his business will also get the proceeds of the $1.2 billion sale of the networks business.

Brown is free from the legal entanglements that Motorola has gotten with a number of technology companies, including Apple Inc. and Microsoft Corp. He said that Motorola Solutions will be "tangentially involved at best."

The knock on Motorola Solutions has been its predictable results. While it weathered the downturn relatively well, Wall Street doesn't see much potential for a rapid ascent to its share price.

"It'll be a steady eddie cash flow grower with a renewed focus from a dedicated management team," said Mark McKechnie, an analyst at Gleacher & Co.

In the third quarter, Motorola's enterprise mobility solutions unit posted revenue rose 9% to $1.9 billion. Its operating earnings also rose slightly to $253 million.

Brown, however, believes Motorola Solutions can grow through an expanded service offering. He said he plans to invest quickly after the separation in offering the option to run public-safety networks on the behalf of governments, creating a more stable recurring revenue stream. The managed service model also applies to the delivery of corporate applications and network management.

Given that Motorola Solutions will emerge out of the split with the goal of an investment grade rating, Brown said he doesn't foresee any acquisitions in the near term.

He also pointed to growth overseas as another potential driver. Motorola Solutions has steadily decreased its dependence on North America, although it still represents 58% of the business's revenue. Brown said there are number of opportunities including selling more public safety systems in Asia and the Middle East. The emerging markets are interested in making the transition to digital from analog networks, as well as inventory and network management. He added the company has three of its four manufacturing facilities overseas, and touted 25,000 channel partners dispersed around the world.

Domestically, Brown said he sees building public-safety networks using a fourth-generation wireless technology called Long-Term Evolution as a catalyst.

The state of government spending has been called into question after Cisco Systems Inc. offered up a surprisingly weak forecast for the current quarter. Motorola's public-safety network business is also heavily tied into local government spending, but Brown said he hadn't seen the same slowdown.

"Government spending remains tight, but many of the products we deliver around national security remain a high priority," Brown said."It's proven to be resilient."

Источник: Total Telecom

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