8. Key Topics
Market Share vs. Margin
Product Portfolio/Roadmap
Inventory Situation
Double-Digit Operating Margins
Why Motorola and Mobile Devices?
9. Market Environment
Margin Growth
Multimedia
Mass Market
Feature Phones Productivity
Large and growing market
Shift towards experiences
Rapidly migrating profit zones
Punishing without a comprehensive,
constantly refreshed portfolio
2007 2008 2009 2010
Source: Motorola
10. Revenue
Revenue $B 1H07 – By Region
2H
$28.4B
1H Latin
$14.8B
America
Asia Pac
16%
$21.5B
21%
$12.2B
$17.1B
$9.0B
$13.6B
EMEA
$9.7B
$9.3B 16%
$8.1B North
America
47%
2006 2007
2004 2005
12. Our Priorities
We will be the premier supplier of
mobile devices and mobile experiences
to customers globally.
THREE FOCUS AREAS:
Enhance the Product Portfolio
Silicon/Software Platforming
Go-To-Market Effectiveness
Drive Efficiency in the Business
14. Ever Changing Regional +
Segment Profit Pools
Mass Market Feature Phone Multimedia Productivity
Communication Iconic Optimized: voice + Mobile office
one extreme connectivity for
Centric, simple High-end feature experience prosumers and
feature sets enabled businesses
Converged: voice +
multiple experiences
Organization, investments, and brand franchises aligned to margin pools
15. New Portfolio
Mass Market Feature Phone Multimedia Productivity
W Series RAZR2 ROKR Z6 / Z8 Q8 / Q9h
16. New Portfolio Feedback/Response
Feature Phone
“one of the best voice phones
this year…”
Editors Choice
“ We came. We saw. We fell in love.”
“ we broke out the stopwatch”
RAZR2 beats iPhone on broadband speeds
“ RAZR is reborn...a new level
of usability”
17. New Portfolio Feedback/Response
Multimedia
“The Z8 movie phone is a
blockbuster…a big screen idol.”
MOTO S9 “kick out great
waterproof sound”
Top 100 hottest gadgets
“MOTOROKR is not just a few letters, it is
spirit that symbolizes freedom and taste.”
A musical smartphone, aiming
to increase the cool quotient
18. New Portfolio Feedback/Response
Productivity
“…a strong challenge to RIM’s
expanding family of Blackberries…”
Editors Choice
“(Q9 h) ”Revenge of the blackberry
killer…”
“… an excellent full QWERTY
keypad.”
quot;Q9 beats them all on the strength
of its keypad alone. It's one of the
best we have ever used.quot;
19. More To Come…Fall 2007
Mass Market Feature Phone Multimedia Productivity
Innovation is alive and well at Motorola!
20. Platforms Enable Quick Alignment
Efficient Software and Silicon Vision
SILICON DIRECTION
Multisource on a controlled architecture
Multisource = competitiveness
Controlled architecture = flexibility
SOFTWARE DIRECTION
Single, open platform for mid/high tier
Single, open platform for lower tiers
Short term resource shift to user interface
Short term benefit from aggressively
managed spend on “end of life” platforms
22. Go-To-Market Effectiveness
Focused, prioritized
Focused, prioritized
regional engagement
channel engagement
Dramatic operational
Differentiated channel
improvement in retail
enablement
FOCUS ON SELL-THRU, NOT SELL-IN
23. Go-To-Market Effectiveness
Focused, prioritized
Focused, prioritized
regional engagement
channel engagement
Dramatic operational
Differentiated channel
improvement in retail
enablement
FOCUS ON SELL-THRU, NOT SELL-IN
24. Go-To-Market Effectiveness
Focused, prioritized
Focused, prioritized
regional engagement
channel engagement
Dramatic operational
Differentiated channel
improvement in retail
enablement
FOCUS ON SELL-THRU, NOT SELL-IN
25. Differentiated Channel Enablement
FROM TO
Collaborative planning/ Motorola owned inventory
forecasting and
OPERATORS Pay on consumption
replenishment (CPFR)
Sell-out
CPFR to distributor Direct-to-retail
Direct store delivery
RETAIL
Sell-in Sell-in with CPFR
Ship direct / build to order
DISTRIBUTOR
26. Go-To-Market Effectiveness
Focused, prioritized
Focused, prioritized
regional engagement
channel engagement
Dramatic operational
Differentiated channel
improvement in retail
enablement
FOCUS ON SELL-THRU, NOT SELL-IN
27. Retail Channel Management
Example: IT
FROM TO
In-house system Scalable commercial system
Data collection Data collection + validation
End-to-end analytics
Limited analytics
Real-time reporting
Daily reporting
29. Drive Efficiency in the Business
Value-chain
Clarity and Defined,
extension
accountability repeatable
processes
Variable Lower the
cost-structure break-even
30. What’s Next?
Tomorrow Future
Today
(2008-2009) (2010+)
(2007)
Music Presence Mobile Community
Experiences
Imaging Mobile TV
Video Playback Video Editing
Morphing UI Create + Share
Mobile Search Fixed Mobile Convergence
Web 2.0
Seamless
3G HSDPA, EVDO WiMAX
Technology
UMA LTE
Bluetooth 4G
Haptics WiFI
Touchscreen Near-Field Communications
Location-Based Services
Application Services
31. Key Topics
Market Share vs. Margin
Product Portfolio/Roadmap
Inventory Situation
Double-Digit Operating Margins
Why Motorola and Mobile Devices?
32. Why Motorola and Mobile Devices?
Experience-driven portfolio to
provide more balanced performance
Progress on transition to optimized
platform
Focused, prioritized approach to
enhance existing customer base
More efficient technology team to
lower break-even
All the above, without mortgaging
the future
Tools to Execute: Talent, IP,
Design/Innovation leadership, Brand
36. Enterprise Mobility Solutions
Complementary product portfolios, customer segments
and distribution channels
Government &
Government
Public Safety
Mission Critical
Public Safety
Systems
Devices
Applications
Services
Enterprise
Retail & Wholesale
Energy & Utilities
Business Critical
Transportation
Manufacturing
Mobile Computing
Warehousing
Advanced Data Capture
Healthcare
Mobile Office
Enterprise Networks
37. World Class Customers
Retail &
Transportation Utilities Manufacturing Other
Government Wholesale
40. Leadership
Mobile Data
Business Terminal
DynaTAC 800x
Pageboy II iDEN i600
Dispatch Radio
Mobile Data
Paging Cellular IDEN
2 Way Radio Solutions
1960’s 1970’s 1980’s 1990’s 2000 2010
2 Way Radio Semiconductor Cellular GSM Mobile Data
Solutions
Canopy
Global System
MC6800 ARDIS Network Mesh
for Mobile
HT220 Communications
43. End-to-End Portfolio Fire & Civil
Police Defense
EMS Agency
TECHNOLOGY THAT’S SECOND NATURE
Seamless
Connectivity
Mission critical systems
Services
Real-time
Information Mission critical applications
In The Hands
Of Users Mission critical devices
44. End-to-End Portfolio
TECHNOLOGY THAT’S SECOND NATURE
Seamless
Connectivity
Mission critical systems
Services
Technology that is second nature…
Real-time
Information Mission critical applications
In The Hands
Of Users Mission critical devices
45. End-to-End Portfolio
TECHNOLOGY THAT’S SECOND NATURE
Seamless
Connectivity
Mission critical systems
…so first responders can focus on
Services
Real-time MISSION, not technology
their
Information Mission critical applications
In The Hands
Of Users Mission critical devices
51. Winning Today
Motorola
Today
Results
(2007)
Analog
Systems
92% customer satisfaction
P25
1st to market with digital radio
Tetra
Fixed Data & Wi4 Portfolio
Wins: Portugal, Ireland, Norway, Denmark
Int’l award backlog at an all time high
Network Defined Radios
Device
MotoTRBO 83% of U.S. Military bases
Laptops
Mobile Computing >$250M in annual WiBB revenues
Video solution in 100 systems today
Text Base Data
Apps
87% statewide/province wide systems
in North America
Biometrics, location, CAD,
RMS, E911, Video
Services
52. Winning Tomorrow
Tomorrow Motorola
(2008-2009) Results
P25 Phase II
Systems
Network
State of Mississippi
Tetra II
Riverside, CA
High Speed Data
ISSI (System Interoperability) Prince George’s Co,
MD
Next Generation Radios
Device
Independence, MO
Multi-mode
Multi-band Norway
Los Angeles PD
Providence, RI
Imaging
Apps
Next Gen 911
Multi-Network Routing
Services … Break/Fix | Integration | Managed
53. Winning the Future
Future
(2010+)
Mission Critical Broadband
Systems
Mission Critical IMS
Smart Radios
Device
Converged
Cognitive
Software Defined
Live Imaging
Apps
Content Management
Application Hosting
Services …
Break/Fix | Integration | Managed | Hosted | Professional
54. Winning the Future
Tomorrow Future
Today
(2008-2009) (2010+)
(2007)
Systems
Mission Critical Broadband
Analog P25 Phase II
Mission Critical IMS
P25 Tetra II
Tetra High Speed Data
Fixed Data & Wi4 Portfolio ISSI (System Interoperability)
Network Defined Radios Next Generation Radios Smart Radios
Device
MotoTRBO Multi-mode Converged
Laptops Multi-band Cognitive
Mobile Computing Software Defined
Live Imaging
Text Base Data Imaging
Apps
Content Management
Biometrics, Location, CAD, Next Gen 911
Application Hosting
RMS, E911, Video Multi-Network Routing
Services … Break/Fix | Integration | Managed | Hosted | Professional
55. Government and Public Safety
Leadership
End-to-End Portfolio
Profitable Growth
Attractive Markets
Market Leader Today
Solutions For Tomorrow
60. The IT Evolution
Age of Centralized Age of Personal
Age of
Computing Computing
Mobility
1960’s 1970’s 1980’s 1990’s 2000’s
Age of Distributed Age of Networked
Computing Computing
61. Delivering Enterprise Anywhere to
Enterprises Everywhere!
Retail & Wholesale Manufacturing Transportation Warehouse/Distribution
from the shop floor at the loading dock on the road to the corner office
Financial & Energy & Utilities
Healthcare Professional Services
62. End-to-End Solutions
Connect Communicate Control
Capture
Mobile Advanced Enterprise
Computing Data Capture Networks
Messaging | Management | Security
Services | Repair & Maintenance | Professional Services | Managed Services
64. Profitable Growth
Total Revenue $B 2H
1H
$1.9B
$1.8B
$1.7B
$970M
$880M
$880M
$1.0B
$898M
$885M
$853M
2004 2005 2006 2007
Symbol Technologies, Inc. Motorola Enterprise
The 2004-2006 results from Symbol Technologies, Inc. have not been included in
Motorola's financial statements and are shown here for reference only.
65. Revenue
Key Drivers 1H07 – By Region
Refresh & new business
investment
EMEA
Mobility outside the 28%
Americas
four walls
65%
Emerging growth markets
AP
7%
Motorola
66. Revenue
Business Mix 1H07 – By Product
10%
Margin rich
66%
Mobile Computing
Attractive to partners
24%
Enterprise Networks
Attractive to carriers
Advanced Data Capture
Industry leader
67. Expanding Market
Key Drivers
Total Available Market
$14.1B
CAGR 14%
Enterprise mobility momentum
$2.9B
$12.4B
$2.2B
$10.8B
Growing mobile workforce
$11.2B
$9.6B $1.6B
$10.2B
$1.2B
$9.2B
$8.4B
New markets; new opportunities
CAGR 10%
Expanded products &
Voice & Messaging
solution portfolio
Core
Consumerization of the
Enterprise
2008 2009 2010
2007
68. Success in the Enterprise
Enterprise Opportunity
Growing TAM
Unique position
Solid growth & margins
Our Priorities
Customer success
Profitable growth
Business expansion
What You Can Expect From Enterprise
Integration efficiencies
Double-digit growth
Double-digit OM
74. Home & Networks Mobility
Market Landscape
Newly Aligned End-to-End Portfolio
Delivery and Performance
Consumer/Market Growth Drivers
Market Opportunity – Focused Approach
Keys to Success
75. Market Landscape –
Customer and Technology Convergence
At Home Mobile / Internet
Wireless
Video DBS MSOs Consumer CE
Services
Data
Muni WiFi
Voice
Telcos Cellular VoIP
Providers
76. Market Landscape –
Customer and Technology Convergence
At Home Mobile / Internet 1
Wireless Telefonica, SingTel,
BT, Verizon, AT&T
…video launches
Video DBS MSOs Consumer CE
2
Services
MSOs launch triple
play bundle
1
Telmex launches
VoIP in Brazil
Data 3
4
Muni WiFi Sprint/Cable JV
begins offering
mobile voice service
(Pivot)
4
3
Voice Verizon launches
mobile video broad-
Telcos Cellular VoIP
cast
Providers
2
KDDI announces
plans to launch IP
video
77. End-to-End Solutions & Expertise
Customer Customer
Access Home-to-Go Home-to-Go
Seamless
Premises Premises
Technologies Technology Experiences
Mobility
Technology Experiences
Core
MPEG4 IP Infrastructure Follow Me TVTM
Video Entertain- Media Gateways Anywhere, Anytime
ment Devices Access
Switched FTTx, HFC, Seamless Voice Portable Media
Digital Video Voice Gateways Players Media Mobility
XDSL, Time Shifting
Fixed Mobile Data Gateways Video NXT – Generation Remote Home Control
Wi4/WiMAX
Convergence Handsets
Converged Media Personalized M-Wallet
Cellular
Network Gateways Content /
Mobile TV
Management Advertising
End-to-End Services and Experience Management
82. Consumers Demanding Media Mobility
Mainstream Cutting Edge Tomorrow
Personalized Content
Bundles Services Blended Services
on Demand
Converged Platform Content as a Service
Fixed Mobile
Dan’s Media
Internet on TV
Fixed Voice Internet
Susan’s Media
Social TV
Mobile TV
Mark’s Media
Video Wireless
Angie’s Media
87. From Prime Time To ‘My Time’
Trend
Cable VOD DVR Impact
Advertising Subscribers Households
Revenue (M, WW) (M, WW)
165M
$42B
($B, US) Changing TV viewing habits –
what, when, where
Increased personalized and
$27B
localized content
65M
$21B
58M
Local and networked DVRs become
extended video libraries
33M
25M
More powerful solutions for
14M
voice & data bundle
2005 2007 2011 2005 2007 2011 2005 2007 2011
Forrester, Kagan, ABI, Motorola
88. From Prime Time To ‘My Time’
Motorola Solutions Acquisition Customer Solution
Personalized and Targeted Advertising;
First-to-Market in Digital Ad Insertion
Start Over™
Time-Shifted TV
Home Media DVR™
Motorola Follow Me TV™ Solution
Mediacipher™ DRM
Unparalleled Content Security
Need For Speed - Ultrabroadband DOCSIS 3.0
90. Broadband On The Go
Trend
Mobile Video Mobile Impact
Mobile VOD
Messaging Infotainment (Users - M, WW)
(Users - M, WW)
(Users - M, WW)
596M
Media mobility driving incumbent
operators to WiMAX or LTE
(1,295 WiMAX licenses globally)
398M
Incentive for new entrants to enter and
289M
compete quickly
254M
168M
Momentum in WiMAX
embedded devices
83M
53M
28M Greater focus on fixed mobile
14M
convergence
2011
2005 2007 2011 2005 2007 2011 2005 2007
Motorola, Strategy Analytics 2006
91. Broadband On The Go
Motorola Solutions Acquisition Customer Solution
Leadership in WiMAX End-to-End Solutions
Broad CPE Portfolio - Anywhere, Anytime Access
Complete Services Portfolio
Mobile TV Solutions – Devices and Applications
92. Motorola WiMAX Leadership
30 Active Trials Worldwide
20 Additional Trials Pending Europe
Russia & CIS
2.5, 3.5 GHz
2.3, 2.5,
3.5 GHz
Canada Netherlands
Canada
2.5, 3.5 GHz Russia
Austria
United States Ukraine
USA France
China
2.3, 2.5 GHz Japan
UAE
Israel
Taiwan
Bangladesh
Pakistan
Mexico
Middle East & Asia Pacific
Brazil Africa 2.3, 3.3,
Malaysia
Central & 2.5, 3.5 GHz 3.5 GHz
South America
2.5, 3.5 GHz
Australia
South Africa
Chile
Deployments Trials
Wateen Sprint Clearwire Agni VTR Neckarcom Worldmax TDF Mena Softbank Maxis Neotel TVA
Pakistan USA Global Bangladesh Chile Germany Netherlands France Bahrain Japan Malaysia S. Africa Brazil
94. Market Opportunity –
Home and Networks Mobility
TAM $B
Converged Solutions
100
Voice & Data
Video Systems & Solutions
80
WiMAX
60 LTE
UMTS / HSDPA
40
CDMA
iDEN
20
GSM
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15
95. Focused Approach
Expanded Leadership in End-to-End Video
Next generation technology and applications
IPTV and MPEG4
Globalization of video business
Capture Broadband Network Expansion Wave
Global leadership in end-to-end WiMAX
GPON for wireline operators globally
Cable bandwidth expansion
Position for LTE migration
Optimization of 2G/3G/iDEN portfolio
Growth in Service and Experience Management
Leverage organic and acquired services solutions
96. Keys to Success
Deliver Manage and
next-generation exploit the portfolio
solutions
Exceed customer Deliver
expectations double-digit OE
98. Our Markets
Industry Sales $B
$328B
CAGR 8%
$302B
$282B
$260B
$239B
Enterprise Mobility
Home and Networks Mobility
Mobile Devices
2006 2007 2008 2009 2010
99. Our Financial Performance
Total Revenue $B 1H07 - By Region
Latin
2H
$42.8B America
11%
1H
$22.4B
$35.3B
Asia
$29.7B $19.1B
17%
$15.6B
North
$20.4B
America
$18.2B
54%
$16.2B
$14.1B
EMEA
18%
2005 2006 2007
2004
100. Our Progress
Customer-Focused Structure
New Operating Leadership Team
Gross Margin Expansion
Lower Cost Structure
Reduced SIC and Channel Rationalization
Symbol Integrated and Performing Well
Cash Conversion Cycle – A Top Priority
Margin-Driven vs. Revenue Orientation
101. Pillars for Sustainable Growth
Innovation
Economic
Value Drives
Operational Discipline
Shareholder
Value
Execution
103. Leveraging Our Strengths
Brand and Global Distribution
Design Leadership
Comprehensive Video Assets
Carrier and Enterprise Customer Relationships
Indirect Channels and Growing Retail Presence
End-to-End Orientation
WiFi, WiMAX, Cellular Experience and IP
104. Goals
Sustainable Profitability in MDB
Expand MDB Product Portfolio
Improve Operating Margins
Lower Cost Structure
Leverage Leadership Position in Video
Extend Category Leadership in
Enterprise Mobility
Lead in 4G
105. Operating Business Model ─ Segments
Mid-to-high single-digit Revenue growth
Single-digit sales growth
EMS H&NM MDB
sales growth
Profitability
High single-digit OM
Solid double-digit OM improves to
double digits
EMB Networks
GPS Home
Declining sales
Mid-to-high Double-digit Double-digit Gain profitable share
in mature
single-digit sales sales growth in sales growth over time
technologies,
growth core markets
Double-digit OM Improved gross margin
partially offset by
Continued strong Double-digit OM contribution by product
WiMAX and LTE
double-digit OM as they scale Lower overall cost
Continue to
Focused structure
optimize mature
investments,
Minimize operating
technologies to
further
margin swings
fund 4G
international
expansion Sales growth
momentum 2009
and beyond
106. “The quality of our
expectations determines
the quality of our action.”
- André Godin
119. Cash Conversion Cycle
The Best of the Best
30
Dell
20
10
Apple 0
DAYS
-10
-20
Amazon
-30
-40
Ebay
-50
2004 2005 2006 Q2 ‘07
Dell -39 -36 -33 -33
Apple -26 -19 -27 -42
Amazon -23 -23 -18 -11
Ebay 16 18 21 22
120. Cash Conversion Cycle
85M
$
Improving Motorola’s CCC by
1 day would increase cash by:
121. Cash Conversion Cycle
Improving Motorola’s 2007 CCC to:
25 Days 0 Days -25 Days
2.0B 4.0B ~ 6.0B
$ $ $
~ ~
122. Value Chain
1.6 Months 0.6 Months 3.3 Months
Total
Supplier In- EMS Supplier Motorola Plants Plants In- Distribution In- Key
Inventory
Inventory Transit ODM Owned Buy / Sell Piece WIP Transit Center Transit Customers
Investment
Specific Inventory Parts & Inventory
For “Hubbing” Finished in Channel
MOT Goods
4-6
Points OE
Supply Demand
Closed Feedback Loop
123. Value Chain
Assembly by EMS
XCVR
Packing &
Total C/T
MDO Shipping
Flip Assy Packing
Building
Shipping 0.5 days
LCD/Housing
=
I I Ship to
Flip Packing XCVR
XCVR
Flip Assy Material internal/
& Shipping Packing
Assembly
in EMS Picking external
from EMS Online
Test
Flip in Moto customer
Hub WH
69
Capacity 5.5K/Shift(Supperlin)ne
DJ qty 600
2hrs .5hrs
hours
30hrs 12hrs 12hrs 12hrs .5hrs
Total C/T
Flip – BE – Packing One Piece Flow
MDO Shipping
One Piece Flow
=
I I Material Pallet &
In-house
Flip Assy/XCVR Assembly & Packing Online
Picking & Shipping
Unpacking
Piece
Moto
part
15.5
WH
inHub Capacity 5.5K/Shift(Supperlin)ne
DJ qty 600
25hrs .5hrs
hours
12hrs .5hrs
78%
Cycle Time reduced by
124. Linearity – Enterprise Mobility (EMB)
What Does Linearity Mean?
To evenly distribute over the period measured (quarter)
Objective is to ≥ 60% by end of week 8
Why Is Linearity Important?
Improves margins
Improves working capital
Why Is EMB Good at It?
Performance tracked and reported weekly
Component of sales comp
Sales commissions paid monthly
126. Business Model
Sales Gross R&D as SG&A as OE as
Growth Margin % Sales % Sales % Sales
8-10% 32-34% 9% 11% 12-14%
127. Operating Business Model ─ MOT
For 2008, expect:
» CCC of 20-30 days
» Profitable in all businesses
» Significantly improved cash flow
and ROIC
» 7,500-head reduction plan
implemented
» $1B cost savings in place – net
of acquisitions and investments,
expect $500M reduction in Opex,
2008 vs. 2007
