
What happened to Motorola - marban
http://www.chicagomag.com/Chicago-Magazine/September-2014/What-Happened-to-Motorola/
======
m_throwaway
(Sorry for the throwaway; I still work for the same company and we we still
have various relationships with each other.)

I worked in like '04-'08 building third party mobile software for a large
variety of manufacturers and devices. Remember, this was pre-iphone, so there
was a big business in building component X for device Y on platform Z.

In my experience of device manufacturers:

Nokia was insanely arrogant; the google of its day. Sony Ericsson were quite
good, it showed that they wanted to build a quality experience.

The Japanese manufacturers were absolutely insane. They would routinely
produce P1 bug reports in the style of "we opened the X application
repetatively. On the 1154th time it crashed on start-up. Sometimes."

We had a few projects with Motorola together with US carriers. They were total
nightmares - the Motorola engineers seemed like they had been picked up from
the streets of Hyderabad the day before. (This is not a racial prejudice: most
of the Indian engineers I've come across in the industry have actually been
remarkably talented. This is not valid for the Motorola engineers though.)
Most of these device projects were very high profile in the US, and presumably
important for Motorola; yet they couldn't or wouldn't muster better staffing.

~~~
Roboprog
Hmm. Maybe that's why Google kept about 600 or so out of 17,000 or more.

The streets of Hyderabad, eh? I can only imagine, having been there about 2
years ago. The level of construction and build-out is amazing. Where are all
of the "trained" workers going to come from?

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cwal37
This is really a fantastic, in-depth article, and highlights a lot of pieces
about Motorola's history of which I was totally unaware. The breadth of their
innovations was far greater than I realized, and the early decision to set up
a world class shop in China seems to be very visible today in that area of the
world.

That the internal competitions eventually led to internal war between
different "tribes" doesn't totally surprise me. It seems you always read about
that eventually happening in the post-mortem of any company with that type of
structure. I wonder if there's a good way to balance internal competition. I
imagine you would have to keep close watch on the overall silo-ing of each
department.

I'm from the Chicago area, and I remember driving by their campus many times
over the years as a kid, only really having an idea that they were somehow
involved in phones. I was in high school when the Razr came out, and based on
how popular it was I thought Motorola was an absolutely world-dominating
company, not a business on the rebound from extremely heady heights.

~~~
salem
I was in Motorola labs until 2003, and the article is spot on.

I had heard crazy stories back then, for example how the handset division
(PCS) had to reverse-engineer Motorola Semiconductor products after buying a
phone on the street in Hong Kong because they could not get the specs
internally.

The whole idea of Motorola competing with itself sounded as crazy to us then
as it does now.

Motorola was way too silo'ed and metrics driven, with a ruthless focus on
efficiency, that was often short sighted. I guess no one there read the
Innovators Dilemma.

~~~
pavlov
Drawing lessons from _The Innovator 's Dilemma_ is harder than it seems.

In the early 2000s, Nokia's management team often referred to the book. CEO
Jorma Ollila has said that he tried to build a corporation that would avoid
the traps described in the book. Yet when we look back now, it seems obvious
that Nokia was coasting on increasing profit margins and incremental
innovation to drive its featurephone and Symbian smartphone lines.

How did that happen? My impression is that Nokia misjudged their market
position. They saw themselves as the upstart innovator as compared to
traditional PC vendors.

Just before the iPhone was unveiled, Nokia introduced the N95 smartphone with
the tag line "This is what computers have become." In Nokia's eyes, their
phones were going to disrupt computers in a few years. But they were beaten by
Apple's better vision of what the disruptive mobile computer should look like,
and they never recovered from that punch.

~~~
rational-future
I remember when the iPhone 1 was introduced there were comments here that it
will inevitably kill Nokia. At the time I was wondering what those guys are
smoking :)

~~~
joezydeco
If you combine 2007 and 2008, Nokia sold nearly _1,000,000,000 handsets_ in
those two years. That's One Capital-B Billion.

 _Nobody_ thought an 800-lb gorilla like Nokia could ever be unseated. Looking
back, it's still boggling that the collapse took a mere seven years.

~~~
sendmorbutt
True. It's still mind boggling when I think about that.

------
mikeash
The rise and rapid fall of Iridium fascinates me. They poured so much money
into something with so little chance to succeed. And yet, it survives to this
day. Essentially, the original investors inadvertently gave the system as a
gift to the world.

One story that has stuck with me goes that there was a presentation pitching
the business case for Iridium. One part of the presentation goes, cell phone
usage is projected to rise by X by the time Iridium becomes operational,
leaving the market of Y - X for Iridium. Another part of the presentation
goes, cell phone usage has consistently outstripped expectations by a factor
of four, therefore our upside is even greater than we might expect. Apparently
not realizing that the two claims contradicted each other, and that if cell
phones really were growing so fast, it would mean little would be left for
Iridium, which is of course what happened.

But I can't remember where I saw it, and I can't dig it up now. Anyone happen
to know if I'm remembering anything remotely close to reality, and where I
might find info on it?

~~~
mikestew
The story I heard, and I don't care enough to even go looking for a link, was
that some executive's wife couldn't make a phone call while on their yacht and
thus the idea of Iridium was born.

Whether or not that is true (and I would guess it's either not, or heavily
exaggerated), either your story or mine does seem to drive home the misplaced
optimism of the Iridium investors.

Speaking for myself, when I'm touring the US on a motorcycle I can make do
with some lack of cell coverage. If I really cared that much, and needed
emergency communication, I'd bring a handheld amateur radio with which I can
just about always hit a repeater when a cell phone has no signal. If I were to
absolutely, positively have to have some means of emergency comms, I'd go buy
a SPOT for a lot less than Iridium. And if Iridium ever had a chance to at
least be viable, SPOT seems to have put a nail in that coffin.

So the market we're left with is folks that have a need to vocally chatter to
someone else no matter the circumstances. There are only so many war zone
reporters and mountain climbers to go around, though.

~~~
ihnorton
> There are only so many war zone reporters and mountain climbers to go
> around, though.

The U.S. Department of Defense is Iridium's largest customer by far, and kept
them alive with a large cash infusion at one point (if memory serves).

Also, fun fact: iridium modems provide the only continuous data link for the
U.S. South Pole station. There are 12 modems ganged together, used for e-mail
and weather info transfer. Bandwidth: 28.8kbps. (the station also has several
high-bandwidth uplinks, but the coverage windows for those are limited, and
they have to compete with NASA/ISS for bandwidth).

~~~
omegaham
When I was just about to get out of the military, I was offered a job as a
radio technician at that station - 60k a year. I turned to my buddy (who had
gotten the same offer) and said, "Who in their right mind would take 28 bucks
an hour to work in _Antarctica?_ "

~~~
Padding
That might be quite apealing to some. 60k isn't that little if most of life's
necessities (housing, food, clothing, etc.) are provided to you for free.

Plus no relatives to ever deal with again, til you retire.

I would've probably taken the offer, but as it stands, I probably lack the
qualifications required.

------
bane
It really is shocking what a shadow of its former self Motorola has become.
There was a time, not all that long ago that Motorola CPUs were a really valid
alternative for a huge percentage of personal computers, that's really
impressive.

Atari, Commodore, Sega, Apple, SNK, Sharp, Texas Instruments, Sun, and more
all made significant systems with their chips.

~~~
rational-future
I have Moto G, and Moto G 4G phones and they are very, very good. And they are
selling well.

~~~
corford
Second that. The Moto G 4G punches well above its weight and I couldn't be
more happy with mine (speed, battery life, fit & finish - it's all excellent).

The only thing that isn't great is Lenovo buying Motorola. I have a feeling
this will mean we wont get many android updates in the future :(

------
sirkneeland
As a Nokia employee, reading this article is like viewing my own corporate
history through a funhouse mirror.

~~~
marban
At least Motorola didn't make tyres, right?

~~~
johansch
[http://www.nokiantires.com/winter-tires/nokian-
hakkapeliitta...](http://www.nokiantires.com/winter-tires/nokian-
hakkapeliitta-8/) :)

~~~
ajb
Heh. A while back it looked like Nokia's market cap was on a trend to dip
below that of Nokian Tyres, but it seems to have turned around now.

------
MIKEMAC972
Great article and very interesting comments. One big takeaway for me is the
fact that Google retained ownership of all patents after they sold the
business to Lenovo. It'll be interesting to watch Google utilize those across
their entire business, not just on the mobile side.

~~~
wutbrodo
The patents were one of the main reasons the Motorola buy/sell was such a net
win for Google (and that's without considering the benefit of strengthening
the diversity of the Android ecosystem, tho we obviously don't yet know how
successful that strategy was). When you factor in the value of the patents,
the sale of Motorola Home, the tax benefits they got from Motorola's losses,
and one last bullet point that I simply can't remember right now (ugh): what
looked like a big loss for Google ended up making them something under a
billion dollars (and again, this is before considering the value of the actual
strategic intent of the deal).

~~~
eru
That's strange, they made money on the deal, but got tax benefits from the
losses?

------
silverlake
I was at Motorola from 90-98. I recall that they were a bloated engineering
bureaucracy that didn't understand software at all. The other thing is
everyone knew Chris Galvin was going to run the company. Lots of executives
left during that period. Finally, the iPhone killed everybody: Nokia,
Ericsson, Blackberry. It was inevitable. When markets make big shifts, big
companies can't adapt.

~~~
marban
However the mid 2000s were the period of the highly successful Razr series
which is still the #1 clamshell phone to date in terms of sales numbers. The
very first Android phones weren't that bad either.

~~~
joezydeco
The RAZR succeeded on design, the software sure wasn't the key attraction of
that device. Motorola's phone O/Ses (yes, plural) were all very underpowered.

Something the Chicago Magazine article doesn't really mention is the death of
Geoffrey Frost in 2005. Frost spearheaded the RAZR's marketing and started to
turn Moto's fortunes around in the early 2000s. After Frost passed, things
went rudderless on the eve of the iPhone and Android.

[http://archive.fortune.com/2006/05/31/magazines/fortune/razr...](http://archive.fortune.com/2006/05/31/magazines/fortune/razr_greatteams_fortune/index.htm)

 _" He also had spun an appealing narrative about how Motorola was cool again,
and a myth about the slick downtown Chicago design studio where the phone had
taken shape."_ (Which never existed)

~~~
Scuds
> The RAZR succeeded on design, the software sure wasn't the key attraction of
> that device. Yup. Synergy was probably fine for little B&W lcd screen
> devices, but they kept hacking onto it...

> Motorola's phone O/Ses (yes, plural) were all very underpowered.

More on this: "What killed Motorola? Not Google! It was Moto's dire software"
[http://www.theregister.co.uk/2012/11/29/rockman_on_motorola/](http://www.theregister.co.uk/2012/11/29/rockman_on_motorola/)

------
immy
I interned in PCS 2002-2004. Android wasn't out yet (but Danger Sidekick was)
and Moto was already working on a Linux+Java OS. That project was the
division's great hope, but missed deadlines on and on.

Cramming a Java OS onto 2004 mobile hardware, very risky choice of a savior.

Half the interns used Treo, Sidekick, LG. Half had a Razr.

------
fndrplayer13
As a Chicagoan who worked in another closely related telecom company, the
presence of Motorola _was_ huge. Not so anymore, but its certainly a
'hallowed' name in the area. You definitely hear a lot of stories regarding
the way bonuses used to work, and what it was like working for a company that
was sort of "Google-ish" for its day. Its sad whats happened to Motorola, but
that is the way the economy seems to work. Another great unmentioned Chicago
Telecom name here is Bell Labs. Chicago Mag could certainly write an entire
article about the storied rise and fall of that company too.

It just seems like all the Chicago technology greatness has melted outwards to
the coasts. Silicon Valley and NYC (as well as foreign businesses) tend to
dominate the areas that Motorola, Bell Labs, etc used to rule.

~~~
aidenn0
As someone who went to Purdue and would have liked to stay in the Midwest, it
astounded me how few tech jobs were available in the Midwest (I graduated in
'04).

I didn't get a single callback of any sort from a company in the Midwest until
18 months after my graduation and it was to interview for a 1 year contract
position at less than half what I was making at the job I accepted in Southern
California. Nearly all my friends had similar situations, ending up on one of
the coasts, or Austin.

------
rayiner
tl;dr: We gave away our competitive edge to the Chinese in return for goosing
short term profits, and are now paying the price.

~~~
ojbyrne
Thats pretty tl;dr. Just looking at the graph I'd say this part was more
important:

"Motorola poured $2.6 billion and countless engineer hours into a $5 billion
consortium to develop it. But once Iridium was finally operable in the late
1990s, its bulky $3,000 phones and $7-a-minute calls proved prohibitively
expensive. Iridium declared bankruptcy in 1999 and sold off the bits for $25
million."

Because that was when the decline started.

