selling its cellphone business to Google--presumably so that Google will be able to create a serious competitor for Apple in mobile devices (like the iPhone and iPad) and acquire Motorola patents for the growing Silicon Valley patent war.
In the early 1990s, Motorola dominated mobile devices like Apple does today. The company pretty much invented mobile technology. Apple, for its part, was becoming a second-rate computer maker, about to lose its franchise in graphical user interfaces to Windows 95. In 1989, when Motorola was on the launching pad, Bill Taylor and I interviewed the company's remarkable young CEO, George Fisher, for Harvard Business Review. Fisher (who had recently taken over from the legendary Bob Galvin) was certain, as we all were, that Motorola stood to grow into cellular's international standard; he was then setting up a venture fund for start-ups.
After I left HBR, I undertook (among other consulting projects for Motorola University) to review the corporation's cellphone penetration strategy into China and write its case history. Motorola was the first to be granted the right to maintain a wholly-owned subsidiary, rather than be forced into a joint venture. By 1997, Motorola was first in every major market in which it competed in China, and maintained the largest presence of any global company operating in the country. Motorola’s rate of growth here had been unprecedented: the company was under $250 million in sales in 1992, and reached $1.5 billion in 1994. It expected to be at $10 billion by the year 2000.
There was talk then of Motorola, which made Apple's microprocessors, buying licenses to Apple's operating system and bringing it to Chinese hardware maker, Panda, which would then conquer the Far East before Microsoft got there. It is easy to imagine that had Motorola maintained its trajectory, it would have been the place where "convergence" between cellular and computers would have happened. (For those interested in a good international business story, you can read the case by clicking here.)
In those years, you walked around the Schaumberg campus, as I did almost weekly, and saw people walking with silver and gold access cards around their necks. The gold ones were for people with more then 15 patents, if I remember correctly. They were accorded great respect. Patents, then, were not developed merely to threaten Silicon Valley start-ups with lawsuits, or to keep competitors from suing you in a strategic game of mutually assured destruction. There was talk of Motorola, then a $30 billion company, becoming $100 billion by 2000. The corporation led American companies in developing quality standards, and was expert in working with schools to improve public education.
MOTOROLA'S TRAGEDY, LIKE all tragedies, was not in doing the wrong thing but doing the right thing too long. In the mid-nineties, Motorola dominated the analog technology that its people-with-the-gold-access-cards had developed and which was, indeed, the standard. When digital cellular technology became feasible, Motorola management delayed implementing it, fearing this would cannibalize its own infrastructural systems, certain it had time to transition, afraid to demoralize its proud engineers, unable to make the transition to a consumer handset company. (I once visited a cellphone product manager who took a new model phone, put it to his nose, and exclaimed: "I love the smell of software in the morning.")
And before Motorola turned around, Nokia and Ericsson had jumped on the new digital technology and stolen its thunder, even in China. The rest is history (that is, the one Motorola didn't hire people to write).
A friend of mine at Duke recently did a rough calculation of how fast one third of Fortune 500 companies were "selected out"--failed or bought out. A generation ago this took about 13 years. Today this takes 4 years. Put that together with software companies buying hardware companies, almost as an afterthought, "for the IP," and lament the speed with which America's great companies can be made and unmade. Oh, and the next time you hear some economist smugly talking about "putting people back to work" by using, well, analogs to the 1930s, think about how economists, of all people, can be right too long.