Motorola Exec Says the Company’s Split, Effective Today, Is Good for RFID

Jan 04, 2011Today marks the official split of Motorola into two separate entities: Motorola Solutions Inc. and Motorola Mobility Inc. Bob Sanders, the senior VP and GM of Motorola Solutions, has told RFID Journal that the split will improve Motorola's ability to serve its business customers and lead to greater investments in radio frequency identification, which he says was the fastest-growing area of the company's portfolio.

"As we manage our product portfolio, we are looking at where the growth will be going forward, and that's where we will invest," Sanders states. "It is too early to get into specifics, but a lot of the money [from our enterprise solutions] went into turning around the mobility business. Now that the companies are separate, we can funnel dollars into the best opportunity. RFID is a bright spot, and will be an area where we will continue to invest. We want to take advantage of the growth in the market."

Motorola Solutions does not break out RFID as a separate business, so Sanders could not provide specific numbers regarding the revenue from Motorola's handheld and fixed RFID readers. However, he says, "Growth has been explosive. It is one of the fastest-growing businesses under the Motorola Solutions umbrella. Item-level tracking is really taking off, and we are seeing a lot of folks doing asset tracking. We expect to see continued double-digit growth for many years to come."

Greg Brown, who served as Motorola's co-chief executive officer prior to the split, will head Motorola Solutions, which will offer RFID, wireless network gear and communications equipment for public-safety agencies and businesses. Sanjay Jha, Motorola's other co-CEO, will lead Motorola Mobility, the spin-off that will produce cell phones, cable modems, set-top boxes and other equipment for cable operators.

Both companies will be listed on the New York Stock Exchange as of today. Motorola Mobility Holdings Inc., the holding company for Motorola Mobility, will trade under the ticker symbol MMI, while Motorola Solutions Inc. will trade under MSI.

Some Wall Street analysts have been pushing for Motorola to split into two entities for several years, believing that the slower-growing but steady enterprise business incorporated under Motorola Solutions was reducing shareholder interest in the faster growing but more volatile cell-phone business.

One goal of the split, Sanders says, is to unlock shareholder value, though he adds that the two businesses are different, and that the split will enable each to thrive unencumbered by the other. The cell-phone and set-top box business is largely consumer-focused, he explains, while the RFID and communications-equipment business is focused on government and companies.

"We will have much more agility as separate companies," Sanders says. "Motorola Solutions will be able to plow profits back into research and development, and potentially make acquisitions where that makes sense."

Radio frequency identification will definitely benefit from the split, he adds, noting, "We see RFID as a very strategic element on the enterprise side of the house. Item-level has really taken off this year. We think it is the tip of the iceberg."