Motorola Facts 95

Overview

Motorola is one of the world's leading providers of wireless communications, semiconductors and advanced electronic systems and services. Major equipment businesses include cellular telephone, two-way radio, paging and data communications, personal communications, automotive, defense and space electronics and computers. Communication devices, computers and millions of other products are powered by Motorola semiconductors.

The fundamental objective of the company is Total Customer Satisfaction. The company was a winner of the first Malcolm Baldrige National Quality Award in 1988, in recognition of its superior company-wide management of quality processes. Motorola maintains sales, service and manufacturing facilities throughout the world, conducts business on six continents and employs more than 132,000 people worldwide.

History and Evolution

The company was founded by Paul V. Galvin in 1928 as the Galvin Manufacturing Corporation, in Chicago, Illinois. Its first product was a "battery eliminator," allowing consumers to operate radios directly from household current instead of the batteries supplied with early models. In the 1930s, the company successfully commercialized car radios under the brand name "Motorola," a new word suggesting sound in motion. During this period, the company also established home radio and police radio departments; instituted pioneering personnel programs; and began national advertising. The name of the company was changed to Motorola, Inc. in 1947. The decade of the 1940s also saw the company enter government work and open a research laboratory in Phoenix, Arizona, to explore solid-state electronics. By the time of Paul Galvin's death in 1959, Motorola was a leader in military, space and commercial communications, had built its first semiconductor facility and was a growing force in consumer electronics.

Under the leadership of Robert W. Galvin (Paul Galvin's son), Motorola expanded into international markets in the 1960s and began shifting its focus away from consumer electronics. The color television receiver business was sold in the mid-1970s, allowing Motorola to concentrate its energies on high-technology markets in commercial, industrial and government fields. By the end of the 1980s Motorola had become the premier worldwide supplier of cellular telephones, and in the early 1990s received its first orders as the prime contractor for the IRIDIUM® satellite-based, global personal communications system.

Operating and Financial Results

Sales and earnings set records in 1994, as strong growth continued throughout the company's major businesses. Sales increased 31% to $22.2 billion from $17.0 billion in 1993. Earnings were $1.56 billion, compared with $1.02 billion in 1993. Fully diluted earnings per share were $2.65, up 49% from $1.78 in 1993.

Investments in research and development totaled $1.86 billion in 1994, compared with $1.52 billion in 1993.

[1994 net sales by business segment graphic]

Organization and Management

The company's operations are highly decentralized, with business operations structured as sectors or groups, depending on size. There are currently four sectors: the Semiconductor Products Sector, the General Systems Sector, the Land Mobile Products Sector, and the Messaging, Information and Media Sector. There are two groups: the Government and Space Technology Group, and the Automotive, Energy and Controls Group. In addition to these sectors and groups, the New Enterprises organization manages Motorola's entry into strategically relevant, emerging, high-growth and high-technology global business opportunities.

All of Motorola's businesses report to an Office of the Chief Executive, which includes Gary L. Tooker, Vice Chairman and Chief Executive Officer, and Christopher B. Galvin, President and Chief Operating Officer. William J. Weisz is Chairman of the Board, a position that is separate from management. Robert W. Galvin serves as Chairman of the Executive Committee of the Board of Directors.

Products and Technologies

By specific product line, Motorola serves its customers as follows:

The Semiconductor Products Sector designs, produces and distributes a broad line of discrete semiconductors and integrated circuits, including microprocessors, RF devices, microcomputers, memories and sensors.

The General Systems Sector designs, manufactures and distributes RF-based cellular radiotelephones and systems, personal communications systems, computers and microcomputer boards.

The Land Mobile Products Sector designs, manufactures and distributes analog and digital two-way radio products and systems for conventional, shared and private applications worldwide.

The Messaging, Information and Media Sector designs, manufactures and distributes a variety of messaging products, including pagers and paging systems, wireless and wireline data communications products, infrastructure equipment, systems and services.

The Government and Space Technology Group specializes in research, development and production of electronic systems and products for U.S. government projects. The group's Satellite Communications Division is developing the IRIDIUM® satellite-based communication system.

The Automotive, Energy and Controls Group designs and manufactures a broad range of electronic components, modules and integrated electronic systems and products for automotive, industrial, transportation, navigation, communication, energy systems, consumer and lighting markets.

Fundamental Objective

To reach its fundamental objective of Total Customer Satisfaction, the company acts within a framework of key beliefs, goals and initiatives. Key beliefs include conducting business with uncompromising integrity and constant respect for people. Company goals are to develop best-in-class people, marketing, technology, manufacturing, service and productsincluding hardware, software and systems; increase global market share; and provide superior financial results. Key initiatives are to produce products and services to a Six Sigma (99.9997% defect-free) standard, reduce total cycle time in all activities, lead in the areas of product, manufacturing and the environment, improve profitability and provide a creative, cooperative workplace, with empowerment for all.

Building On Technology Platforms

Motorola's strategy for growth begins with the semiconductor -- the basic building block of the Information Age. The company's semiconductor portfolio ranges from discrete transistors to the most advanced microprocessors. It enables Motorola to mix and match different technologies on a single chip to produce combinational capabilities for its customers. As the world moves to digital systems that require more semiconductor content, the arenas of computing, communications and consumer electronics converge.

Wireless communications is one of the fastest-growing markets for semiconductors. Products such as pagers, cellular telephones and personal communicators require low power consumption, efficient packaging, information compression and advanced system architectures. These demands drive Motorola's semiconductor business to develop the technologies that are reshaping the electronics industries, resulting in the most advanced power and signal devices, sensors, microcontrollers, fast static random access memories and digital-analog components. Microprocessors, microcontrollers and other devices are at the heart of communications equipment, computers, automobiles and millions of other products. Motorola is the fourth-largest semiconductor producer in the world.

Radio frequency technologies helped create the platforms from which industries such as two-way land-mobile radio, paging and cellular telephone were launched. Today, software, battery technology, low-power semiconductor, digital signal processing, satellite, fuzzy logic and neural network technologies are among the developments that promise to help launch new generations of industries.

Motorola is the world's leading producer of mobile and portable cellular telephones, and the second-largest maker of cellular infrastructure equipment. With analog and digital technologies, a broad line of voice and data products, and a global distribution and service network, Motorola is the world leader in two-way land-mobile radio.

In paging, Motorola is the world leader and is an early leader in the developing wireless data industry. Wireless data products include local and wide-area data networks, mobile and portable data terminals, wireless modems, data network services and wireless personal communicators. From simple paging to sophisticated satellite systems, Motorola's wireless technologies promise to give consumers around the world a wide array of communications services at affordable prices.

In the realm of advanced electronics, Motorola's businesses extend to space and satellite communications systems, automotive electronics, computer systems and single-board computers, flat panel displays, quartz and ceramic components, electronic ballasts for fluorescent lighting, and batteries and battery chargers.

Motorola Corporate Communications
1303 East Algonquin Road
Schaumburg, IL 60196
Phone: +1 (708) 576-5000

Motorola is an Equal Employment Opportunity/Affirmative Action Employer
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