|Industry||Telecommunications, consumer electronics|
|Founded||January 4, 2011|
Chicago, Illinois, United States
|Key people||Rick Osterloh, President and COO|
|Employees||3,485 (Q2 2014)|
(sale pending to Lenovo)
Motorola Mobility is an American telecommunications equipment corporation headquartered in Chicago, Illinois. It was formerly Motorola's cellular phone division, which was called the Personal Communication Sector (PCS) prior to 2004. It pioneered the flip phone with the StarTAC in the mid-1990s. Motorola had a commanding lead in the analog cellphone market, but it was slow to embrace digital technology. By the turn of the 21st century, it produced another successful product, the (original) Razr, a very thin flip phone. Most recently, it has produced smartphones and tablets using Google's Android operating system. The division also handled the production of cable modems and set-top boxes for digital cable and satellite television services. On January 4, 2011, Motorola's mobile device and set-top box division was spun off into a separate company as Motorola Mobility, while the remainder of the company was renamed Motorola Solutions.
Shortly after the split, Google, the lead developer of Android itself, announced in August 2011 that it would acquire Motorola Mobility for US$12.5 billion, subject to regulatory approval. Google's intent for the purchase was to acquire the company's portfolio of patents so it could adequately protect other Android vendors from lawsuits. The deal closed in May 2012, after which it also sold its set-top box business to Arris Group. In late 2013, Motorola notably launched two new smartphones, the Moto X and Moto G, and unveiled Project Ara, a concept for a modular smartphone. Google's ownership of Motorola would be short-lived, as the company announced in January 2014 that it would sell most of Motorola Mobility to Chinese personal computer maker Lenovo for $2.91 billion. The deal is set to close by 2015.
Motorola Mobility was formerly known as the Mobile Devices division of Motorola until it was spun off as a separate entity in January 2011. Motorola Mobility consists of the Mobile Devices business which produces smartphones and the Home business which produces set-top boxes, end-to-end video solutions, and cable modems.
In 2002–2003, Motorola's Mobile Devices department reinvented itself. Three areas of significant improvement were user friendliness, design and brand. Motorola started paying more attention to the user experience, and models such as the v300, v400, and v600 (called the triplets) were among the devices that were easy to use. Besides ease of use, Motorola also stressed design and brand image. The result of the focus in these aspects led to the Razr V3.
Split, acquisition by Google
On January 4, 2011, Motorola Inc. was split into two publicly traded companies; Motorola Solutions took on the company's enterprise-oriented business units, while the consumer divisions were spun off to form Motorola Mobility.
On August 15, 2011, Google announced that it would acquire Motorola Mobility for $12.5 billion, pending regulatory approval. Critics viewed Google as being a white knight, since Motorola had recently had a fifth straight quarter of losses. Google planned to operate Motorola as an independent company. In a post on the company's blog, Google CEO and co-founder Larry Page revealed that Google's acquisition of Motorola Mobility was a strategic move to strengthen Google's patent portfolio; at the time, the company had 17,000 patents, with 7,500 more patents pending. The expanded portfolio was to defend the viability of its Android operating system, which had been the subject of numerous patent infringement lawsuits between device vendors and other companies such as Apple Inc., Microsoft and Oracle Corporation.
On November 17, 2011, Motorola announced that its shareholders voted in favor of the company's acquisition by Google Inc. for $12.5 billion, receiving approval from the United States Department of Justice and the EU on February 13, 2012. The deal received subsequent approval from Chinese authorities and was completed on May 22, 2012. Alongside the completion of the acquisition, Motorola Mobility's CEO Sanjay Jha was replaced by Dennis Woodside, a former Senior Vice President at Google.
On August 13, 2012, Google announced that it would cut 4,000 employees and close one third of the company's locations, mostly outside the United States.
On April 9, 2014, following the departure of Woodside, lead product developer Rick Osterloh was named the new president of Motorola.
Acquisition by Lenovo
On January 29, 2014, Google announced it would, pending regulatory approval, sell Motorola Mobility to the Chinese technology firm Lenovo for US$2.91 billion in a cash-and-stock deal—which will include the sale of $750 million in Lenovo shares to Google to give it a roughly 6% stake. Google will retain the Advanced Technologies & Projects unit (which was reintegrated into the main Android team) and all but 2000 of the company's patents. Lenovo had prominently disclosed its intent to enter the U.S. smartphone market, and had previously expressed interest in acquiring BlackBerry, but was reportedly blocked by the Canadian government due to national security concerns. Lenovo's CEO Yang Yuanqing stated that "the acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones".
In May 2014, Motorola announced that it would close its Fort Worth factory by the end of the year, citing the high costs of domestic manufacturing in combination with the weak sales of the Moto X (which was manufactured at the plant) and the company's increased emphasis on low-end devices and emerging markets. The decision to close the plant was not directly connected to the Lenovo acquisition.
In development since July 2003, Motorola released the Razr V3 in the third quarter of 2004. Because of its striking appearance and thin profile, it was initially marketed as an exclusive fashion phone, but within a year, its price was lowered and it was wildly successful, selling over 50 million units by July 2006. Over the Razr four-year run, Motorola sold more than 130 million units, becoming the bestselling clamshell phone in the world.
Motorola released other phones based on the Razr design as part of the 4LTR line. These include the Pebl U6, Slvr L6, Slvr L7 (more expensive variant of Slvr L6), Razr V3c (CDMA), Razr V3i (with upgraded camera and appearance), V3x (supports 3G technology and has a 2-megapixel camera), Razr V3xx (supports 3.5G technology) and Razr maxx V6 (supports 3.5G technology and has a 2-megapixel camera) announced on July 2006.
The Razr series was marketed until July 2007, when the succeeding Motorola Razr2 series was released. Marketed as a more sleek and more stable design of the Razr, the Razr 2 included more features, improved telephone audio quality, and a touch sensitive external screen. The new models were the V8, the V9, and the V9m. However, Razr2 sales were only half of the original in the same period.
Because Motorola relied so long upon the Razr and its derivatives and was slow to develop new products in the growing market for feature-rich touchscreen and 3G phones, the Razr appeal declined while rival offerings like the LG Chocolate, BlackBerry, and iPhone captured consumer attention, leading Motorola to eventually drop behind Samsung and LG in market share for mobile phones. Motorola's strategy of grabbing market share by selling tens of millions of low-cost Razrs cut into margins and resulted in heavy losses in the cellular division.
Motorola capitalized on the Razr too long and it was also slow adopting 3G. While Nokia managed to retain its lead of the worldwide cellular market, Motorola was surpassed first by Samsung and then LG Electronics. By 2007, without new cellphones that carriers wanted to offer, Motorola sold tens of millions of Razrs and their offshoots by slashing prices, causing margins to collapse in the process.
In January 2007, then-CEO of Motorola Ed Zander rode a yellow bike onto the stage in Las Vegas for his keynote speech at the Consumer Electronics Show. Zander departed for Dell, while his successor failed to turn around the struggling mobile handset division.[not in citation given]
Motorola continued to experience severe problems with its cellphone/handset division in the latter-2000s, recording a record $1.2 billion loss in Q4 2007. Its global competitiveness continued to decline: from 18.4% market share in 2007, to 9.7% by 2008. By 2010 Motorola's global market share had dropped to seventh place, leading to speculation of bankruptcy of the company. While Motorola's other businesses were thriving, the poor results from the Mobile Devices Unit as well as the 2008 financial crisis delayed the company plans to spinoff the mobile division.
Sanjay Jha took the reins of Motorola's Mobile Devices Unit. Motorola's biggest customer Verizon Wireless needed a competing product since AT&T Mobility had an exclusive deal to carry the iPhone. After the Windows Mobile was delayed, Jha settled on Google Android as the operating system for all subsequent Motorola phones.
Motorola shifted its Operating systems from their proprietary software to Google's Android operating system and in October 2009, Motorola announced a forthcoming smartphone named "Droid" that launched on the Verizon network on November 6, 2009. "Droid" was a major success for Motorola Mobile Devices. It received the "Time Gadget of the Year" award in 2009. In 2010, Motorola launched "Droid X" and "Droid 2". Droid X was again a major success, which has helped Motorola to regain much of its market share in the United States.
Atrix 4G, Droid Bionic, XOOM, and Droid RAZR
On January 5, 2011, Motorola Mobility announced that the Atrix 4G and the Droid Bionic were headed to AT&T and Verizon, respectively, with expected release dates in Q1 of 2011. The Atrix was released on February 22 as the world's first phone with both a Dual-Core Processor and 1 GB of RAM.[unreliable source?] The phone also had optional peripherals such as a Multimedia Dock and a Laptop Dock which launched a Webtop UI.[not specific enough to verify] On February 24, two days after the release of Atrix, the company released Motorola Xoom, the world's first Android 3.0 tablet,[unreliable source?] and followed it up shortly afterwards with an update to make it the world's first Android 3.1 tablet.
In the fourth quarter of 2011, Motorola unveiled the Droid RAZR, the world's thinnest 4G LTE smartphone at that time at just 7.1 mm. The Droid Razr featured Kevlar backing, the same used in bulletproof vests, and a Gorilla Glass faceplate.
Though Jha managed to restore some of the lost luster to Motorola Mobility, through its last years as a division and then as an independent company, it still struggled against Samsung and Apple. Even among Android manufacturers, Motorola had dropped behind Samsung, HTC, and LG in Q2 of 2011. This may have been attributed to the delay in releasing 4G LTE-capable devices, as well as setting the prices of its new products too high.
In an August 2013 interview, Motorola Corporate VP of product management Lior Ron explained that the company will focus on the production of fewer products to focus on quality rather than quantity. Ron stated, "Our mandate from Google, from Larry, is really to innovate and take long-term bets. When you have that sort of mentality, it’s about quality and not quantity".
Speaking at the D11 conference in Palos Verdes, California, in May 2013, Motorola CEO Dennis Woodside announced that a new mobile device would be built by his company at a 500,000 square-feet facility near Fort Worth, Texas, formerly used by Nokia. The facility will employ 2,000 people by August 2013 and the new phone, to be named "Moto X", will be available to the public in October 2013. The Moto X featured Google Now software, and an array of sensors and two microprocessors that will mean that users can “interact with [the phone] in very different ways than you can with other devices”. Media reports suggested that the phone will be able to activate functions preemptively based on an "awareness" of what the user is doing at any given moment.
On July 3, 2013, Motorola released a full-page color advertisement in many prominent newspapers across the United States. The advertisement claimed that Motorola's next flagship phone will be "the first smartphone designed, engineered, and assembled in the United States". On the same day that the advertisement was published, ABC News reported that customers will be able to choose the color of the phone, as well as add custom engravings and wallpaper at the time of purchase.
In early July 2013, the Wall Street Journal reported that Motorola will spend nearly US$500 million on global advertising and marketing for the device. The amount is equivalent to half of Apple's total advertising budget for 2012.
On November 13, 2013, Motorola Mobility unveiled its latest smartphone the Moto G, a relatively low-cost handset. The smartphone will be launched in several markets, including the UK, United States, France, Germany, and parts of Latin America and Asia. The Moto G is available in the United States, unlocked, for a starting price of US$179. The device is geared toward global markets and some US models support 4G LTE. Unlike the Moto X, the Moto G is not manufactured in the United States.
At the time of the product launch, the device featured the Android 4.3 Jelly Bean operating system; however, Motorola's CEO guaranteed that an upgrade to KitKat (4.4), the latest version of the Android platform, would be released in January 2014. The upgrade was actually released on December 19, 2013. The device also features a 4.5-inch (11.43-cm), 1280 x 720 HD display with a pixel density of 329 ppi, and a Qualcomm Snapdragon 400 processor.
The Moto E was announced and launched on May 13, 2014 and is targeted at emerging markets like India and Latin America or price conscientious consumers.
Moto 360 is a round smartwatch, powered by Google's Android Wear OS.
- Samsung Electronics
- Apple Inc.
- BlackBerry Ltd
- LG Electronics
- Sony Mobile Communications
- Micromax Mobile
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