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  #1 (permalink)  
Old 08-05-2014, 11:02 PM
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Default Motorola Solutions to shrink - again

Faced with a slump in its core police-radio business...

http://www.chicagobusiness.com/artic...o-shrink-again

Last edited by blantonl; 08-10-2014 at 11:54 AM..
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Old 08-06-2014, 10:11 PM
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While looking forward to looming federal investigations, and inquiries into sole sourcing...
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Old 08-06-2014, 10:31 PM
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Link the O.P. provided doesn't work anymore, this one is working -
http://www.chicagobusiness.com/artic...o-shrink-again
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Old 08-07-2014, 2:16 AM
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Default Motorola Faces Slump in Land Mobile Business

There are several reasons for Motorola's current predicament.

Public Sector Budgets - Due to shrinking budgets, many local governments can no longer refresh public safety equipment nearly as frequently as they once could. Buildings, vehicles and items such as two way radios are kept longer and replaced only when absolutely necessary. It is difficult to plan sales forecasts for new products when your customers have less to spend every year.

Competition - Other land mobile radio (LMR) vendors can provide equivalent or good enough equipment to satisfy requirements and cost less. The California Dept. of Forestry once used Motorola equipment on their trucks; today Kenwood is their preferred supplier.

Management - Motorola made the right decision by selling off the cell phone business. Now Motorola needs to reassert its dominance in the LMR sector with some compelling new ideas. From what I can tell interoperability between agencies is far from resolved in almost any region of the U.S. Imagine the usefulness of public safety radios that could create their own mesh networks on demand.
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Old 08-07-2014, 7:26 AM
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I have to agree with ssmith39, most public safety agencies that purchase Motorola products did so with Homeland Security and FEMA grants which are almost non-existent today. But I think another issue is in pricing, why purchase 500 XTL2500's at $2500 a piece when departments and agencies can buy Kenwood, iCOM, BK/Relm or TAIT for way less and still receive a great product? Another possibility for declining sales could be in how Motorola dictates territorial sales, stating which company can sell their product in which area. The red tape a authorized dealer has to fight with Motorola can be a beach! Be interesting to see where Motorola Solutions go in the coming months.
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Old 08-07-2014, 7:37 AM
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Quote:
Originally Posted by Ronaldski View Post
Link the O.P. provided doesn't work anymore, this one is working -
http://www.chicagobusiness.com/artic...o-shrink-again
hmmm works for me
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Old 08-07-2014, 8:38 AM
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Quote:
Originally Posted by ssmith39 View Post
Management - Motorola made the right decision by selling off the cell phone business. Now Motorola needs to reassert its dominance in the LMR sector with some compelling new ideas.
They are dominant. The problem is their customers have gone broke doing business with them. Motorola builds a great product, both subscriber unit and infrastructure wise, but their bullying tactics and business practices are catching up with them.

LMR itself is a very narrow market these days. Many users of LMR have migrated to cellular and aren't looking back. Motorola's competition from across the ocean knows this, and has cut their product lines to much lower cost systems that perform very well and give a good ROI.

The average Motorola Solutions P25 CAI network for a small to medium sized city/county costs 2 to 5 million dollars to procure, and $150,000 a year to maintain. These cities and counties are having to cut cost and simply cannot afford these high dollar, high maintenance LMR networks. They are also looking to the future, when the promise of LTE means lower cost MSUs and integrated advanced networks are around the corner in the next 7-10 years or even sooner.

So, they either make due patching and piecing a decades old system together, or replacing it with a cost effective interim solution such as DMR, NXDN or even TETRA which can cost only a couple hundred thousand to procure and only a few grand a year to operate compared to a P25 CAI network. Interoperability is a buzz word tossed around like a new fad drug at a swinger's party. It isn't as complex as some vendors make it out to be, and it doesn't mean implementing a complex large scale LMR network to achieve.

Motorola Solutions is like Sears and every other American giant. They are top heavy with mid to upper management, and demand for what they have to offer is shrinking.

They will be on the auction block in 3 to 5 years. Watch and see.
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Old 08-07-2014, 10:16 AM
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LMR itself is a very narrow market these days. Many users of LMR have migrated to cellular and aren't looking back.
Am I the only one that thinks that the death of IDEN is the reason the LMR business is shrinking? Of course we can blame Sprint for pulling the plug... I for one don't believe that Moto should've dumped Mobility.

Motorola used to made A LOT of IDEN hardware that was used everywhere in the country. And it was a very feature rich for its price. I believe that many business given the opportunity would stick with a quasi-lmr service such as IDEN to this very day if it still was there. But now packet based PTT is garbage and buying TRBO radios is cost prohibitive for a company that has to buy a cellphone plan anyway. Also you don't have commercial TRBO infrastructure everywhere.

But the posters blaming the FEMA/DHS faucet on going dry also have a point. Most agencies won't be able to fork over big millions on buying APXs for $4k a piece even to join a bigger area wide systems. I'm still surprised that there are places that elect to build standalone systems for couple million but that's gonna end soon. I'm surprised how often there's a news on the front page about a standalone system built for a small city that costs $2-3 million and in the end they join a wide area system anyway.

The LTE might be the future but unless there will be some serious movement to deploy band 14 infrastructure on a large scale no single agency will have the resources to do it by themselves.
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Old 08-07-2014, 10:50 AM
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Motorola created their own position they are in today with the management style they chose to take years ago. When the board of directors dumped the Galvin family, that was the start of what we are seeing today.

Lack of care about the customer care, lack of the ease of doing business with Motorola became the choice of the company. They chose to be the 900 pound gorilla in the industry and built up this huge set of hurdles for most customers to climb over. Their equipment prices flew to the height of the clouds. Support for their equipment became like walking through a mine field. Cost of depot support jumped out of sight with long turn around times and lost equipment along the way. Motorola has fought implementation of open P25 standards for years. They keep trying to inject company proprietary features to lock out other radio vendor equipment on their trunking systems.

Their radio system bids went out of site. They have consistently tried to to be the bid drafter for any open bids by agencies. This caused many to cry foul and bid rigging when equipment specific specs were implanted in the bid specs. If you did managed to re bid a project, the Motorola bid always came down by a huge amount. In the cases of a trunking system with multiple tower sites, it was not unusual to see million dollar reductions from the original bid price from Motorola.

Can't blame anyone but the management at the top for what is going on today. Times have changed. Public safety funds have become tight. Grant money has all but dried up that Motorola has lived on for many many years. The next 12 to 24 months will really tell on just what becomes of Motorola. The days of making good hay are over. Motorola needs to do some serious soul searching and get down into the plowed fields with the average farmer today. Learn what it is like to have to live off of the dirt beneath your feet that the farmers have lived off of their whole life.
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Old 08-07-2014, 12:36 PM
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Quote:
Originally Posted by MTS2000des View Post
The average Motorola Solutions P25 CAI network for a small to medium sized city/county costs 2 to 5 million dollars to procure, and $150,000 a year to maintain. These cities and counties are having to cut cost and simply cannot afford these high dollar, high maintenance LMR networks. They are also looking to the future, when the promise of LTE means lower cost MSUs and integrated advanced networks are around the corner in the next 7-10 years or even sooner.
I can't speak with authority on any other systems, but I can speak with authority on mine. This statement above is dead on for us.
We used to have about 500 or so radio, all Motorola. Over the years that number has shrunk to nearly zero, and here is why:
-When CDF adopted Kenwood as the standard, our fire department eventually followed. There was a cost savings.
-When our police department needed new radios, a careful cost comparison was done, and they have stopped purchasing Motorola. Again, cost savings.
-When our single site 800MHz SmartNet system needed replacement we looked at all our options, P25, LTR, staying analog, MotoTrbo, NXDN, etc. Since 95% of the users on this system are not public safety, P25 was ruled out due to extremely high cost. Plumbers, bus drivers and garbage trucks do not need a $4000 P25 radio. There is precisely ZERO need for the guy emptying the dumpsters to need to talk directly with a police officer. Cost ruled out P25.
MotoTrbo was a serious contender, until we ran into Motorola's marketing techniques. Motorola had very specifically blocked 800MHz MotoTrbo radios from accessing NPSPAC channels, the ones we were licensed for. Motorola's answer was: You -MUST- purchase P25. My answer: No I don't. Bye.
The LTR and analog solutions were given serious consideration, but in the end we went with NXDN. Big cost savings compared to P25.

Pricing is a big issue with Motorola, and their sales/marketing techniques have very directly driven us to other brands. We are a small site, so this wouldn't even show on Motorola's radar. But I know for a fact that we are not the only ones that have had to make similar decisions.
While there may (or may not) be some economic recovery, the money has not trickled down to us yet. Budgets are still tight all around. Expecting our users to purchase $4000 radios was not even close to realistic. Our PD didn't want to spend that much on equipment considering the there are new technologies on the horizon, and not one of the local agencies they work with are running anything over than VHF analog.

Quote:
Originally Posted by MTS2000des View Post
So, they either make due patching and piecing a decades old system together, or replacing it with a cost effective interim solution such as DMR, NXDN or even TETRA which can cost only a couple hundred thousand to procure and only a few grand a year to operate compared to a P25 CAI network. Interoperability is a buzz word tossed around like a new fad drug at a swinger's party. It isn't as complex as some vendors make it out to be, and it doesn't mean implementing a complex large scale LMR network to achieve.
Abso-freakin-loutly correct. Interoperability is a political buzzword. Being able to interoperate doesn't mean having to purchase expensive radios. It means having people smart enough to look at the issue and come up with a logical solution. If none of the surrounding agencies are running 700MHz P25, it is absolutely foolish for a department to run out and spend millions on such a system.

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Originally Posted by MTS2000des View Post
Motorola Solutions is like Sears and every other American giant. They are top heavy with mid to upper management, and demand for what they have to offer is shrinking.

They will be on the auction block in 3 to 5 years. Watch and see.
Should be interesting to see what happens. Like the big Bell's, their monopoly has a crack in it. Technology is changing and if they fail to keep up, they'll get pushed aside. Motorola's sales and marketing attitude is holding them back. They make a lot of great radios, but there are some people that need to get out of the way.
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Old 08-07-2014, 2:35 PM
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If Bolatorola slumps deeper into the slime, please don't let Obama bail them out with our tax money!
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Old 08-07-2014, 3:21 PM
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If Bolatorola slumps deeper into the slime, please don't let Obama bail them out with our tax money!
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One could pretty easily argue they are already being bailed out with taxpayer money.
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Old 08-07-2014, 3:28 PM
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Am I the only one that thinks that the death of IDEN is the reason the LMR business is shrinking? Of course we can blame Sprint for pulling the plug... I for one don't believe that Moto should've dumped Mobility.
iDEN killed the mom and pop SMR/radio shop back in the late 1990s when Nextel (prior to Sprint even thinking about them) wanted to compete for more consumer business and play cellphone company on SMR spectrum. I know, I worked at a local two way shop who maybe did $300K a year in sales. The owner barely made payroll. One thing he did have was a 5 channel LTR system on 800MHz on a desirable mountaintop site just north of town.

Nextel offered him a million bucks a channel on a Friday. On Monday, the door was locked and a note saying our final paychecks would be mailed. We never got them. But we did get all the leftover inventory and test equipment.

Fast forward to today, the "mom and pop" radio shops survive off local business. When big systems like Nextel or statewide DTRS, for that matter, come to town, the local shops are forced out of business. They simply cannot compete. The Wal-Mart effect?

With Sprint shutting down Nextel, too many SMR operators waited too late to get their TRBO/NXDN/TETRA networks up to the task. No nationwide footprint or even regional coverage existed. Many of those former Nextel fleets were either converted over to Sprint Direct Connect (which is nothing more than PTT over cellular) or those customers churned to other commercial wireless carriers. In some areas/regions, there are still some iDEN networks (Southern Company still operates their SouthernLinc system, though it will be phased out soon). Combine this with a high capital cost of LMR subscriber equipment, and many businesses just use cellphones.in 1996 when Nextel started heavily subsidizing the cost of subscriber equipment, they quickly got the attention of large fleets who, at the time, were used to spending $700-1000 for an analog trunking radio. Once people are "spoiled" by the cheap or "free" subsidized subscriber unit, it is hard to get them to adjust to paying out large CAPEX again, especially with the current economy.

None the less, the cost of setting up some regional TRBONet or tier III DMR or TETRA is far beyond the reach of most two way radio dealers.

LMR has a limited market, governments and businesses alike are broke. They are making do with existing systems or using their cellphones. Motorola Solutions has several promo videos showing why consumer cellphones are a poor choice for business/industrial users. IMO, the cellular industry is more interested in catering to consumers constant need to be on Facebook and not marketing to serious business users who need purpose specific industrial devices and services.

There is money to be made, but the cartels figure they will get it anyway. Everyone from age 5 to 105 has a cellphone today.
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Old 08-07-2014, 4:57 PM
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I personally own 7 Motorola Commercial Radios and 1 Motorola Commercial Hand held out of the 7 Motorola mobiles 2 are cm200 uhf that run a local repeater.. These Motorola radios are very tough and they just work.. Thats right you turn it on and it works and for the most part you can always count on your radio because it was built tough... Back in the day when you had vendors show up and demonstrate there products I remember hearing a story about 15 years ago that once Motorola showed up the show was over because everyone knew that you can throw a Motorola through a brick wall and it will still out perform any radio out there on the market after that sort of abuse.. I personally had a Motorola Mini-tor 5 come unhooked off my fire belt by accident and fall 75 feet to the concrete and it may have been in pieces but the thing just worked... Pager paged just like it was suppose to even in pieces.. This my friend is worth the money when you have a job that requires your equipment to just work with no questions asked day in day out and handle true abuse Motorola Public Safety gear is the way to go! Another example is i have a Motorola Handheld last year fall off the roof of my car and land in flood water while i was helping some one it was under water for over 20 minutes I had a rough idea where it was when it came unhooked with some lighting and the help of the crew that was with me we found it and pulled it out of the water... Guess what... it worked may not have been in that wonderful perfect condition that it was new but I could hear the audio coming back to me and My audio out into the repeater has some buzzing noise but for the most part was fully readable.. Yes I believe in Motorola Technology and the way they build there product yes you will go broke buying there equipment however when lives depend on it some times its not the price tag one should be thinking about.. Its durability and reliability my opinion of what Motorola is doing is great I think they need to cut back and try and survive these rough times and hoping that they pull through because after all as far as in the public safety world I have 99.9% of the time been able to count on my Motorola equipment the .1% percent here shouldn't even reflect back on Motorola but had a dealer once program a radio with the wrong frequencies it was an accident but that would have been the only bad experience with Motorola public safety equipment..
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Old 08-07-2014, 5:20 PM
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Yep, Motorola makes mostly good stuff. No one is really arguing that point. Other manufacturers make good stuff too, and it's often cheaper. Many users have learned that. Taxpayers money is not a bottomless pit, and real world purchasing rules dictate a lot of decisions. Buying a radio because its a brand you like isn't good enough in most cases. Sole sourcing is very hard to do in a rigorous purchasing system, and that is a very good thing. Even Motorola knows this. That is why some of the proprietary features they have worked into P25 are raising so many eyebrows. Circumventing purchasing rules is a major offense, that is if your purchasing folks are obeying the laws most states have about this.

I think if you were to try some of the newer radios from other brands, you'd discover that they are just as rugged. Hearsay about other brands being "crap" aside. Modern radios with IPxx ratings are pretty common.
CalFire/CDF has had good enough luck with Kenwood over the last decade or so. So have many other departments. If they were not rugged and didn't work, they wouldn't be around.
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Old 08-07-2014, 5:42 PM
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One point. There is still LOTS and LOTS of money for radios through FEMA. Nowhere near non-existent. LOTS of money.
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Old 08-07-2014, 6:32 PM
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I have to agree with ssmith39, most public safety agencies that purchase Motorola products did so with Homeland Security and FEMA grants which are almost non-existent today. But I think another issue is in pricing, why purchase 500 XTL2500's at $2500 a piece when departments and agencies can buy Kenwood, iCOM, BK/Relm or TAIT for way less and still receive a great product? Another possibility for declining sales could be in how Motorola dictates territorial sales, stating which company can sell their product in which area. The red tape a authorized dealer has to fight with Motorola can be a beach! Be interesting to see where Motorola Solutions go in the coming months.
I was thinking, maybe Motorola secretely puts the average going price into their model numbers...

XTS2500 = $2500

XTS3500 = $3500

APX7000 = $7000

Am I around the ballpark here? :-)
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Old 08-07-2014, 10:46 PM
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Things keep going like this for Motorola they may need to hit their E-Trigger
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Old 08-07-2014, 11:08 PM
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Things keep going like this for Motorola they may need to hit their E-Trigger
They have hit their E-trigger more than once over the years. But it isn't compatible anymore. What a shame!
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Old 08-08-2014, 1:29 PM
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I think Forbes puts it best:

Motorola's Road to Irrelevancy - Focusing on Its Core - Forbes
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