BOSTON -- Following Christopher Galvin's retirement from Motorola Inc., market research firm Strategy Analytics Inc. believes that the troubled company should retain its loss-ridden semiconductor unit, but must scrap the infrastructure business.
Last week, Motorola announced that Galvin, its chairman and chief executive, has resigned and will retire, following what appears to be a disagreement with the board over the company's progress in the downturn (see September 19 story).
In a report issued today (Sept. 25, 2003), Strategy Analytics believes that Galvin was successful in terms of internal cost cutting, but a new leader is required to make some tougher decisions for the company. "The new leader of Motorola needs to take a hard look at corporate strategy and be willing to divest properties that do not maximize long-term corporate growth potential," said David Kerr, vice president of Strategy Analytics' global wireless practice, in a statement.
"The new leader must decide how Motorola will optimize its portfolio of businesses," he said. "Will it regain handset leadership, be a semiconductor powerhouse, a networking leader, or a volume contract electronics manufacturer?"
The Boston-based research firm offered more advice for Motorola. The company would benefit from retaining its Semiconductor Products Segment (SPS), which Strategy Analytics "views as a pivotal component underpinning long term innovation in cellular feature phones and multimedia devices."
The company's SPS unit should focus on the "embedded intelligence (sector) across the spectrum of consumer electronics terminals on the network edge, and move aggressively away from reliance on its handset group for success in these markets," according to the report.
It should take more painful steps. Motorola should jettison its Global Telecom Solutions (GTS) Segment and exit the overcrowded infrastructure market, according to the report.
The company must also play catch-up in the third-generation (3G) handset and equipment markets. "It has been able to define lucrative market opportunities but has been ineffective in establishing profitable long-term market strategies to capitalize on them," according to the report.
"Strong, consistent visionary leadership can overcome this problem. Despite its platform efficiencies, the company still lags on delivering new products including critical carrier defined features, specifically camera phones and MMS terminals. In addition, the group has yet to define a clear, consistent vision for carriers of the mobile terminals market beyond messaging and 2.5G consumer gaming and entertainment," the report said.