Motorola 2012 Annual Report Download - page 33

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• In the Enterprise segment: Our sales decline in 2012 was driven by a challenging macro environment as many large
customers continued to postpone deployments in the face of soft economic conditions. Despite challenges in the
macro environment, our engagement with customers who continue to invest in our mobile technologies, remains
strong.
Our R&D and capital investments resulted in many new enhancements to our product portfolio, including the
acquisition of Psion plc ("Psion"), a U.K. based leader in mobile computing solutions. We extended retail thought
leadership with innovative new products like the SB1, MC40 and ET1 tablet that help provide customer support while
delivering significant operational efficiencies. Within the data capture solutions product group we continued to
strengthen our product portfolio by executing on the laser to imager transition, including the recent announcement of
the MP6000 multi-plane imager based scanner, which sits inside the check-out counters used by retailers.
Looking Forward
In 2012, we achieved a number of key accomplishments, including solid sales growth, operating earnings expansion and
earnings per share growth, generating strong operating cash flow and significant capital returns to our shareholders, which
positions us well as we begin 2013. The demand drivers for our business remain solid and we remain focused on improving
operating leverage through targeted investments and disciplined cost management.
In the Government segment, our focused R&D investments have led to the introduction of over 100 new products across
both our subscriber and infrastructure portfolios since 2009, giving us the broadest portfolio in the industry. We believe that
while regulatory mandates to improve spectrum efficiency have encouraged some of our U.S. customers to upgrade, our new
product introductions and expanded portfolio will continue to be a driver for growth across our U.S. and international markets,
as customers will continue to invest in our next-generation systems with the assurance that new radios with enhanced features
remain interoperable and backward-compatible.
In addition to our investment in our radio communication systems, we have been investing in R&D for next generation
public safety. Private public safety broadband networks based on the LTE standard are an important next generation tool for
our first-responder customers, and we believe our expertise in both public and private networks makes us uniquely qualified to
provide LTE solutions. The development of this market is an important part of our overall global growth strategy for the
Government segment.
Our government customer base is composed of thousands of customers, predominantly at the U.S. state and local level
with various funding sources. In addition, these customers are at different stages of network evolution and aging in a long
cycle business. We believe the fundamentals for our business and customer base provide a significant degree of resiliency for
this segment even if sequestration cuts were to occur.
In the Enterprise segment, sales declined in 2012 due to a challenging macro environment, unfavorable foreign currency
fluctuations and uncertainty around operating system roadmaps. These factors led to suppressed information technology ("IT")
spend and fewer large deals as compared to 2011 in the key verticals we serve, including retail and transportation and logistics.
Although our 2012 results were impacted by these factors, we believe customers will continue to invest in our mobile
computing, data capture, and WLAN technologies, which yield high return on investment and enable real-time information to
their workforce. In addition, we believe information technology ("IT") and IT hardware spend will increase during 2013.
We feel well equipped to address the uncertainty around operating system roadmaps with our R&D investment in mobile
computing technologies, which enables us to accommodate applications through a variety of different enterprise environments,
including devices on Microsoft with Windows Embedded 8, Android, and at the web-browser level, HTML5. Outside of our
investment in mobile computing, we continue to invest in new products across the Enterprise portfolio that serve many existing
customers, but address market opportunities that are new to us.
Beyond investment in R&D, in 2012, we made acquisitions that are complimentary to our existing portfolio, including
Psion. We expect that the financial results of Psion, which we report in the Enterprise segment, will be accretive to earnings by
2014, as we integrate their technology into our current Enterprise product and services offering.
For the iDEN infrastructure portfolio, which we report in the Enterprise segment, we expect to see a continued decline in
iDEN infrastructure and related services.
We continue to expand our current services offerings, as both our government and enterprise customers are looking for
end-to-end solutions that combine managed services and comprehensive device and network management with our existing
portfolio. We believe we are uniquely positioned to provide our customers products and services that meet mobile workforce
needs, as well as build successful long term relationships.
We are committed to employing disciplined financial policies, achieving our financial plan, and optimizing our capital
structure. In 2013, we intend to continue the quarterly dividends that were initiated in 2011 and intend to continue to invest