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Motorola Mobility Holdings, Inc. (MMI) |
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WIKI ANALYSIS
Motorola Mobility Holdings (NYSE: MMI) Motorola Mobility is the former Mobile Devices division of Motorola (MOT), spun off in a restructuring that left Motorola Mobility as a public independent company. In fiscal year 2010, MMI recorded revenues of $11.5 billion and a net loss of $86 million. MMI primarily serves customers in the United States, China, Brazil, Mexico, Argentina, and Korea. In response to industry trends, MMI is focusing on developing all-in-one solutions, as seen through its acquisition of Zecter in 2010. This acquisition will allow MMI to leverage the on-demand media streaming and synchronization technology and focus on cross-platform access.
Company Overview
Based in Libertyville, Illinois, MMI was created in January 2011 when parent company Motorola split into two independent companies, Motorola Mobility and Motorola Solutions. MMI oversees the mobile device and set-top box business, while its sister company, Motorola Solutions (MSI), looks after the former company's government and commercial clients and manages products such as police radios and bar-code scanners, as well as the division that makes iDEN equipment. The valuable Motorola brand is owned by MMI, and licensed to MSI.
Business Segments
Originally, Motorola's business is divided into three primary segments--Enterprise Mobility Solutions, Mobile Devices, and Home. Motorola Mobility Holdings encompasses the Mobile Devices and Home segments after the spinoff.
Mobile Devices Segment (68% of net revenue for FY2010)
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Within its Mobile Devices segment, Motorola recorded $7.8 billion in net revenue. To keep up with competitors like Apple and Research in Motion, an increasingly greater portion of its product portfolio is made up by smartphones. Its smartphones incorporate the fast-growing Android mobile operating system and have the second highest consumer satisfaction in the industry, according to J.D. Power[1].The company recently launched its first tablet as well as the Motorola ATRIX 6 smartphone, which was named "Best Smartphone" at CNET's Consumer Electronics Show. It also acquired start-up company Zecter to boost its on-demand digital media consumption[2].
Home Segment (32% of net revenue for FY2010)
MMI's Home segment is a provider of digital set-tops and end-to-end video solutions. Through strong relationships with service providers and a deep basket of intellectual property of over 1,900 granted patents, MMI has seen strong growth in this segment. The primary customers are cable operators and wire line telecommunications service providers.
Trends and Forces
Increasing Focus on Cross-Platform Access
The mobile industry is moving towards all-in-one solutions. Motorola has responded by acquiring Zecter in late 2010, a developer of on-demand media streaming and synchronization technology. The acquisition added a cloud-based content access and sharing product called ZumoDrive as well as a personal media streaming product called ZumoCast. These products enhance Motorola's ability to provide cross-platform access to content with wireless sync, integration, and thin-file downloading technologies. Motorolla also announced that it will acquire Sweden-based provider of Internet television software called Dreampark in order to add functionality to its own Medios software line and better fulfill the need to deliver streaming video to wired and mobile computing devices.
Market Share Slipping Due to Increased Competition
As new smartphone such as the iPhone 4 and Blackberry Storm enter the market, Motorola cell phone business market share is declining. Its cell phone business lost about $5 billion in revenue the past three years and contributed to annual losses for the company during the same period. Revenues sank in recent years because the company was late to the dance on introducing smartphone handsets. [3]Motorolla saw a turnaround in revenue growth in the past two years, due to its successful marketing on the Motorola Droid X smartphone, Motorola's first Android-based smartphone. Going forward, Motorola plans to continue competing for market share in the smartphone industry, which is the fastest growing cell phone segment currently.
Competition
In the wireless handset market, MMI competes with other handset manufacturers like Nokia (NOK), Research in Motion (RIMM), Apple (AAPL), and Palm (PALM).
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