Motorola turns to consumer electronics
Motorola is turning to the consumer electronics market as it looks to expand its troubled wireless business in new directions.
On Tuesday morning, the company will announce plans to sell wireless broadband modules that device makers can use to put into consumer electronics products or monitoring devices to provide broadband wireless connectivity. Specifically, Motorola is putting its homegrown wireless technology into embedded modules so that laptops, Netbooks, digital cameras, and other devices can connect to the Internet using 3G HSPA networks, as well as 4G wireless networks using WiMax and LTE technologies.
Motorola's entree into this market is significant because it marks the first time the iconic cell phone maker has sold its wireless technology to other device manufacturers. Up to this point, Motorola has kept its wireless technology for its own products.
But Motorola executives say they see a big opportunity in the consumer electronics and machine-to-machine markets. And right now as Motorola struggles to get back on track, the company could use a new market opportunity to add some extra revenue.
"We see wireless broadband in consumer electronics being a tremendous growth opportunity not just for Motorola, but for the entire industry," said Gary Koerper, vice president of Engine Systems for Motorola Mobile Devices. "In the next five to seven years everything you own will be connected to the Internet."
No hit since Razr
Motorola's wireless business has been faltering for more than two years. The company hasn't had a hit handset since the 2004 introduction of the Razr. And it's steadily been losing market share to competitors, such as Nokia and Samsung. In an effort to revive the failing business, the company ousted its CEO and announced a plan to spin off the handset business.
The company hired Sanjay Jha as a new CEO for the division to steer it back to recovery. But the plan for the spin-off was tabled when the economy tanked. Since then, the company has announced a new plan, which involves cutting back the number of operating systems it uses for its devices and standardizing on only a few operating systems, such Google's Android platform. But so far the fruits of these plans haven't been seen.
The original Razr
(Credit: Motorola)Meanwhile, competition is heating up amid its traditional cell phone competitors. And newcomers, such as Apple with its iPhone and Research in Motion with the BlackBerry, have posed a threat to the company at the high-end with stronger sales in smartphones. This competitive pressure appears to have spurred Motorola to look to other markets to supplement its shrinking wireless revenue.
But Koerper also said that Motorola is not giving up on its plans to revive its handset business.
"The core of Motorola's wireless devices business is still cell phones," he said. "We are still focused on smartphones and Android handsets to drive that market going forward."
Koerper pointed to the emerging Netbook market and smartgrid market as examples of where Motorola's technology could be useful. Carriers such as AT&T and Verizon Wireless are starting to sell mini-laptop computers for a subsidized price with a two-year service contract for their 3G services. And there is a major movement already under way to get the nation's energy companies to put remote monitoring devices into the electrical grid to create a more efficient energy system.
Koerper believes these two markets offer a major opportunity for Motorola because the company has already been developing the 3G and 4G technology necessary to connect these devices to a wireless broadband network for its own wireless products.
"I think it's the culmination of our quiet investment in the things we have already been doing in wireless along with a need in the consumer electronics and machine-to-machine markets for wireless broadband access coming together to create this big opportunity for us," he said.
Big opportunity
Indeed, this could be a big opportunity for Motorola and any company looking to embed wireless broadband technology into consumer electronics devices, such a laptops, Netbooks, digital cameras gaming devices, and other devices.
By 2014, market research firm Strategy Analytics predicts, there will be 100 million devices with 3G and 4G technology embedded in them. Initially, this market will be dominated by laptops and Netbook computers. By the end of 2009, more than half of the 8.4 million consumer electronics devices installed and enabled for 3G and 4G will be notebook computers, Strategy Analytics predicts. And the firm believes that the entire market of 3G and 4G enabled products will nearly double to 16.6 million in 2014
Wireless operators, such as AT&T and Verizon Wireless, are already moving toward 4G networks. Verizon Wireless said it plans to test its 4G LTE network this year and will offer its service commercially in 2010. AT&T is also upgrading its 3G network with a faster generation of HSPA technology. And Clearwire, which is backed by Sprint, Google, Intel, and cable operators Comcast and Time Warner, is also adding more cities to its 4G WiMax network this year and it plans to continue to expand that network in the next few years.
Motorola plans to offer solutions for all three network technologies. Specifically, the company is announcing the Motorola WTM1100, a WiMax network adapter that operates in the 2.5 GHz or 3.5 GHz spectrum to provide WiMax connectivity. The Motorola HTM1000 is a 3G/2G HSPA, EDGE and GPRS adapter that supports downlink speeds of up to 10.1 Mbps and uplinks of 5.76 Mbps uplink, the company claims. These products will be available in the third quarter of this year for testing. And Koerper said they will likely be offered in laptops and Netbooks by the end of the year.
The Motorola LTM1000, a module developed for LTE networks, will offer download speeds up to 100Mbps and upload speeds up to 50Mbps,the company said. This product will be available for device and network sampling by the end of the year and products will likely hit the market starting in the middle of 2010.
Motorola hasn't announced any consumer electronics or machine-to-machine manufacturers that it is working with yet, but the Koerper said the company is already in discussions with companies.
Of course, Motorola isn't the only company going after this market. There are already several companies developing wireless modules for embedded devices, including Novatel and Sierra Wireless. But Koerper said these companies typically use components and technology from other companies, such as Qualcomm. By contrast, Motorola is using all its own technology, which he claims is an added benefit to the company's products.
Koerper said that fitting the technologies together so that they work well together is not trivial. And he said that Motorola has already developed technology to help manage power consumption and to seamlessly switch between wireless network technologies. As a result, he believes that Motorola has the expertise and experience to export its wireless technology to other device manufacturers and be successful in this market.
"There are only a few companies on planet that have shipped their wireless technology," Koerper said. "And there have been a lot of companies that have wanted to. Only a few have been able to do it successfully."
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
Exactly. IBM outsourced to Lenovo. Now Lenovo Makes Thinkpads and IBM lost their market. HP to HTC and now HTC is a major player in Smart Phones.
Outsourcing tends to train your future competition.
- by libertyforall1776 June 2, 2009 12:22 PM PDT
- MOT should buy Palm with their Pre -- it might be the best option for MOT to get back into phones in a major way...
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