Continuing to streamline operations and shift focus to serving wireless carriers, Motorola Inc. last week announced plans to sell the companys Integrated Information Systems Group to defense contractor General Dynamics Corp. for $825 million.
The planned deal comes one week after Motorolas chairman, Chris Galvin, issued a mea culpa and at an analyst meeting acknowledged that his companys financial woes were its own fault and that it must pare down to survive.
"We are very candid with ourselves. ... We understand clearly that the issue has been largely us, and the changes that have to take place have to take place within Motorola," Galvin told the audience at the companys annual analyst meeting in Chicago. "In our opinion, they are, now."
In the daylong briefing, Galvin said that despite massive layoffs and promises to outsource 40 percent of its "nonstrategic supply chain activities," the company is still going in many directions, trying to focus on semiconductors, telematics, broadband, government contracts and wireless.
The General Dynamics deal should help, as Motorola gets rid of the Integrated Information Systems Group, which is responsible mainly for government and defense contracts, officials said.
The goal, said Motorola officials in Schaumburg, Ill., is to make the vendor more appealing to wireless carriers, which are the main customers of back-end and client-side wireless products.
"Carriers are seeking differentiated models that attract customers," said Joe Guglielmi, president of Motorolas Global Customer Solutions Operations. While Guglielmi was not specific about individual plans, the general strategy is to go carrier by carrier to deliver customized solutions rather than try to sell packaged wireless servers such as those offered by Wireless Knowledge Inc., Openwave Systems Inc. and Microsoft Corp.
On the client services side, Motorola said it plans to concentrate on three main areas: messaging, location-based services and mobile commerce. So far, customized Motorola solutions range from a mobile shopping application for pizza delivery to a foldable keyboard for cell phones that fits in a shirt pocket.
The Motorola iBoard keyboard was designed by Think Outside Inc., the company that designs keyboards for Palm Inc.s handheld devices. The keyboard works with Motorola i85s and i50sx handsets and will work with future models, making it easier to perform wireless data tasks such as sending e-mail and entering appointments in the date book. Nextel Communications Inc. will be the first major carrier to offer the keyboard, which is also available through retail channels for $99.
Customized applications and add-on accessories will also be an important strategy for Motorola. The company plans to sell not only chips but also the software development kits necessary to create next-generation phones. Customers may include companies that currently compete with Motorola, officials said.