I yesterday attended a briefing and product announcement hosted by Motorola to introduce their RFS6000 WLAN switch and the AP-7131 802.11n AP. Motorola staff noted that they've shipped more than 125,000 WLAN switches; they rank as number two or three in overall WLAN sales depending upon whose numbers you believe. VoFi is a key element if this announcement, as is mesh. The 7131 is a dual-radio .11n AP that has an option slot for a third radio, like a wireless WAN, to be used for backhaul or meshing. The packing allows for internal or external antennas, and. indoor or outdoor mounting. The indoor "snap-on façade" was designed by Giugiaro Design, yes, the same folks who design some of the Ferrari products (the cars, not others that bear the same name), as well as lots of other automotive and non-automotive items.
The demo of the new products included using Motorola's Canopy outdoor product line to interconnect three different stations, and was quite clever in that the demo staff just started unplugging the wired equipment that otherwise implemented backhaul links. Such was a novel way to point out that the all-wireless office, campus, and beyond are now possible. In short, though, nothing earth-shattering, but some good, competent stuff regardless.
And all of this reinforced in my mind that Motorola occupies a unique position in wireless today. In can be argued that Motorola practically invented modern wireless. The company can trace its roots from the first car radios to, as it might be put today, quite literally everything in wireless from sensors to satellites. They invented the hand-held cellular phone, and today are leaders in those, RFID, wireless LANs, cellular infrastructure, WiMAX, other metro-area point-to-point and point-to-multipoint systems (the Canopy line), and two-way radios. They're broadly active across consumer, enterprise, government, and service-provider markets. They invented (via the Symbol Technologies acquisition) the WLAN switch. They were the first to integrate RFID into a WLAN switch. In short, they are perhaps the only company on this planet that can do everything wireless, implying all kinds of synergies that should put and keep them on top of wireless like Cisco is on top of networking.
Instead, they're under attack by value investor Carl Icahn, who's already succeeded in getting former CEO Ed Zander ousted and continues to talk about breaking up the company. From a purely financial perspective, one can't argue with such a strategy, but it's my hope that someone at the company will make the case that the synergies inherent (but not yet realized) in what Motorola is today are worth much more than the parts alone. It shouldn't just be about quarter-to-quarter performance, but rather long-term success. And if ever there were a company positioned for long-term success in wireless, it's Motorola.
Mathias is a principal at Farpoint Group, a wireless advisory firm in Ashland, Mass.
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Ah, yes. Another insightful
Ah, yes. Another insightful business commentary from Mr. Mathias.
Your comments about Motorola are either woefully misguided or incredibly biased. Obviously you won't disclose what type of consulting fee (if any) you are drawing from Moto, so I guess we'll never know which it is.
Moto has botched their position as a cellular handset vendor and their acquisition of Symbol so royally that it is almost redundant to even mention it. More importantly, you seem to be embracing their failed strategy. Moto seems to be trying to bundle all sorts of wireless technologies together when they often don't fit. That's why their RF switch has been an embarrassing failure.
They seem to lack vision for the WLAN infrastructure they acquired from Symbol and this new idea looks like a loser. Aruba has security, Meru has voice, Trapeze has management, Cisco has Cisco and Moto has... indoor mesh?
Please, Mr. Mathias, at least show a modicum of journalistic integrity and acknowledge that Moto's problems have nothing to do with investors like Carl Icahn.
Biased? Me?
First of all, it's nice to meet you, Rusty. At least you're not anonymous.
Some responses:
1. First of all, analysts are always biased. Having a bias is the very definition of the profession. If we lack bias, we lack value. But the real value is in the reasoning behind the bias, anbd I'm sorry I couldn't make it clearer for you.
2. I do not publish Farpoint Group's client list, as you probably know. But, just this once, Motorola is not at present a client. I just attended a briefing and was reporting my bias, um, er, I mean analysis. And, as you may know, Farpoint Group only works on a project basis, so we have no clients on retainer or otherwise in long-term relationships. I don't own their stock (nor the stock of any wireless or mobile company, so as to avoid charges of actual bias), although I think it's a good buy at present. Just my opinion. Please note that I am not registered to give investment advice.
3. While I'll acknowledge that Motorola has problems with the handset business at present, they remain a leader in that space. Similarly, Symbol - how can a firm that is #2 or #3 in an industry be botching it? Sure, they've got work to do, but it's no meltdown or an "embarrasing failure".
4. My point is that Motorola should be doing a better job of managing synergies that could exist between their product lines. If they were at present so doing I wouldn't have written the column.
5. Carl Icahn is a problem. Do you work as a senior manager in a publicly-held company that has been the target of such action? Have you ever? You might want to try it before you dismiss such issues so lightly.
Thank you again for the note.
Craig.
From the dictionary: "BIAS -
From the dictionary:
"BIAS - prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair."
Essentially, you are trying to sell the idea that unless an analyst has a, "prejudice in favor of or against one thing... usually in a way considered to be unfair," they lack value? Something tells me you didn't know the true definition of the word, "bias," until I just posted it.
If you ask me, being unbiased as an analyst adds value because it allows you to analyze and react, not cherry-pick snippets of information that support your bias.
You believe that Moto is in a great position, but they just need more wireless "synergy." I believe that they need to make their various wireless properties distinct along technology lines (WLAN separate from cell, etc.). That's a reasonable disagreement.
Where I have a problem is in the tone of your article. The article feels like a pro-Moto puff piece. It feels like you are touting Moto's WLAN line and ignoring the fact that the Symbol WLAN line has had a precipitous fall in market share since Moto acquired it.
Last note I have to mention is that victimization really, really annoys me. As a recovering chronic excuse-maker myself, it just makes my skin crawl to see people blame folks like Carl Icahn for their failures. I mean, major corporations court institutional investors like crazy when they are trying to grow but then as soon as a large investor calls them on their mistakes, they start whining about the unfairness of it all.
It's the Reasoning Behind the Bias that Matters
As I noted in the original piece, it's important to explain the reason one has a bias (and, I don't care what the dictionary says, not all biases are bad). I am indeed unbiased until I form an opinion and take a position. My mind can be changed if evidence shows I'm wrong, or my opinion may change over time as technology evolves and markets and products do as well.
In sum: I believe Motorola is a premium brand. It is a global brand. The inherent synergies have more value than does a breakup. That's my thesis.
I am pro-Motorola because I believe the company has a rich history of innovation and progress and thus a place of honor in the history of wireless, and that they can do better. I believe the management distractions generated by raiders like Icahn can (and, in this case, will) detract from solving the underlying problem and could indeed lead to a major sell-off of assets, dismembering the company, and thus keeping the synergies I believe exist from being realized. BTW, Icahn is also just doing his job here. It's just he thinks short term, and, well, I don't. Such is seldom good for the economy, as we're seeing in the headlines every day. Building long-term value is always a good strategy, whether for technology vendors or individual investors.
Look, I've got no stake in Motorola, and I've got well over 1,000 other wireless companies I can spend time on. I've offered my opinion and my analysis, which is the best I can do for given the constraints inherent in the blog medium. I'm actually pleased we disagree; such always helps in getting to the bottom of an issue. Thank you again for the note.
If I may, can you pls. quote the source of your analysis that their WLAN market share has fallen? And, in the interest of full disclosure and disclosing any possible biases, might you identify yourself as well?
Craig.
Craig, your bias is showing...
as always and I, for one, appreciate it. Not sure how Symbol can be considered a failure. Did I miss Intermec scarfing up all their marketshare? There are some exciting things happening on the product front from Symbol and Motorola. Albeit, way too late compared to what they'd promised.
You insights, as always, are appreciated and valuable. Personal attacks and generalizations don't make for good analysis. If there's substantive facts or outlooks, I'd welcome reading that kind of counter argument. No need to defend yourself. You have a pretty astute following. :)
Thank You!
I may write a little more on the bias issue in the future. And I'll try not be defensive... I really do have a pretty thick skin; it's requirement in my line of work.
Thx. Craig.
Craig
Craig,
Thanks for recognizing the technology for what it is...a great opportunity for customers. You get it and your story is just the tip of the larger Networks and Communications offerings and story. There are a lot of firsts and that is in-line with the history and value of Motorola in the communications marketplace.
Dave
botched or cautious?
Rusty,
If you were to operate a manufacturing company with a clear distinction between thin margin, high volume, partner driven, commodity oriented products (cellular business) and thicker margin, people and service intensive - partner driven products (Networking and Mobile Products) does it make sense to keep these disparate models together and blend the margins and investments - or - does it make sense to create two distinct businesses as MOTO is doing?
How would you construct the business for success?
In terms of the on-going merger of the company and products, that is happening. One way to conduct a merger is to kick out all the people and replace with your own. Another way is to bring the people, products, and systems together in a timed, methodical basis - and make sure to continue to grow your number without significant impact to your customers. Moto seems to be doing a fine job with the second, preferred way - and for customers who are seeing that now, the richness of the product line is and will - prove to have major impact to the markets that the company serves. The richness comes through when one realizes the completeness of the Networks and Communcications product lines and the capability to serve private, semi-private, and public communication frequencies. This combination aligns well to markets that are being served today and represents massive opportunity for the customers, for the partners, and for Motorola.
Dave
There will always be critics...
Great article, I do think your statement regarding Motorola's long-term positioning is spot on!
Thanks!
I'm watching Motorola closely - let's see if they can take advantage of the opportunity.
Thx. Craig.