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Motorola has sold countless multi-million dollar digital trunked radio systems to state, county and city governments that are not meeting the needs of the public safety agencies they were intended to serve.  The communications giant has focused on marketing its products largely by buying political influence instead of marketing the merits of its equipment and system integration capability. I think this ill-fated practice will come to an end as broadband voice technology takes over for narrowband P25 systems.

We may start to see some change in Motorola sales strategy before broadband dominates, considering the big deals that are going to be won in California over the next few months that we already know are not going to Motorola.  Add to that,  the State of Oregon selected Harris Corporation over Motorola for its statewide radio system. And most significant, the Motorola BayWEB debacle in the San Francisco Bay Area.  Motorola may realize that its past sales and marketing strategy is no longer effective.

Motorola has a lot of infighting going on right now.  The local team is pointing fingers at the national guys about why BayWEB got so screwed up.  They took their eyes off the rest of what was going on across the west with their existing customers to focus on BayWEB and that move has badly damaged Motorola’s core LMR effort to the benefit of its competitors.

Motorola has become the big guy everyone loves to hate.  Some politicians and government officials may be  happy to accept their favors, but what has this done for Motorola lately?  It’s done more harm than good.

The broadband LTE arena promises to be more competitive, further jeopardizing Motorola’s incumbent position as the leader of the public-safety market. If the public safety voice marketplace shifts to broadband as I suspect it will, Motorola will be faced with unprecedented competition from well-qualified firms.  The incumbent cellular carriers rarely buy core infrastructure equipment from Motorola, and neither will government customers. The carriers have a much higher standard for acceptable performance than most public safety system operators.

Bottom line, I think Motorola (MSI)  will be a candidate for acquisition.  Who will the potential suitors be?  Could Harris Corp. acquire the remains of MSI after it further deteriorates?  Northrup-Grumman?  Or perhaps Ericsson, Nokia or another large corporation with a foothold in the cellular infrastructure marketplace?