Motorola seeks partners for communications arm
By Caroline Daniel in Chicago
Published: December 7 2003 22:00 | Last Updated: December 7 2003 22:00
Motorola expects to take advantage of its plans to spin out its semiconductor product division next year by looking for acquisitions or partnerships to bolster its remaining communications operations, according to a senior executive.
Leif Soderberg, director of global strategy for Motorola, said in an interview that the company recognised it could no longer do everything on its own.
"The semiconductor decision was a big one as it sends a signal that we want to focus on communications, but we are not complacent that by doing that we have the performance we want. It could involve things like partners, and acquisitions are part of the programme."
Mr Soderberg said the acquisitions would "not necessarily be big business defining" but would include software and applications. It would also look to build on its position in the automotive sector and government services division, which has emerged as a key generator of earnings amid the problems in its handsets and semiconductor divisions.
"The automotive industry is another opportunity for us globally to expand the breadth of solutions we offer . . . We got in there because of embedded controls competency and we have a position with tier-one suppliers . . . The car is also becoming a critical point for communications," he said.
Mr Soderberg expected Motorola to become "more active on the venture front". The company is the second-largest corporate investor, investing about $100m a year in early-stage technology funds. It is deciding what to do with its semiconductor-related investments and whether to separate them with the division.
In October, Motorola announced plans to carve out its struggling chip division, a move long advocated by analysts. Mr Soderberg denied the decision had been sudden, saying it followed a fundamental review of the growth opportunities over the past 12-18 months.
"There was a big recognition that there are a lot of opportunities in the core communications business, which had different needs from semiconductors."
Although Motorola last week reaffirmed its guidance for the fourth quarter, on Thursday it warned about problems in supplying camera phones.
"Supply restraints for integrated camera components are posing a challenge to delivery efforts," it said, adding that unit volumes of the phones would therefore be lower than its customers had been requesting. The company has been criticised for being slower to the market with camera phones than rivals such as Nokia and Samsung. |
