Motorola bids farewell to automotive electronics and strengthens its competitive strength in communications

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Motorola bids farewell to automotive electronics and strengthens its competitive strength in communications [Copy link]

As the world's second largest mobile phone manufacturer, Motorola has considerable strength and experience in the fields of wireless, broadband and automotive communications, and has become a unique global supplier in the automotive electronics industry. Motorola's automotive communications and electronic systems have a huge impact on the global automotive electronics industry. The department has been committed to providing embedded in-vehicle intelligent communication systems and has made contributions in many fields such as powertrain, chassis, sensors and body electronic control. However, Motorola does not want to continue to promote such an important department. Recently, its marriage with Germany's Continental Group announced the complete end of its automotive electronics business.

　　Eager to get rid of the burden?

　　According to EE Times, on April 3, 2006, Continental and Motorola announced that the two parties had signed an agreement for Continental to acquire Motorola's automotive electronics business. According to the agreement, Continental, a leading global automotive parts supplier, will acquire all of Motorola's automotive electronics businesses, including automotive control, sensing, body electronics and in-vehicle communication systems, for approximately US$1 billion in cash, and will integrate the acquired Motorola automotive electronics business into Continental's automotive systems division. Subject to special transaction conditions and legal and regulatory constraints, the entire acquisition transaction is expected to be completed in the first half of 2006. Regarding this transaction, China Electronics News contacted Mr. Lin Xinfu, President of Motorola China, as soon as possible, but Lin Xinfu said that since the acquisition between the two parties has not been completed, he cannot accept any interviews from reporters for the time being. Some experts said that after selling automotive electronics, Motorola will get rid of another burden, which will greatly help it to focus on making greater breakthroughs in the fields of wireless and broadband communications.

　　In fact, as early as mid-September 2005, Motorola's idea of getting rid of its automotive electronics business had surfaced. The Wall Street Journal made an analysis: Motorola is considering selling its automotive electronics department mainly because the market competition in the automotive parts industry is becoming increasingly fierce, and consumers have reduced the cost of buying cars, which has led to a grim situation in the entire industry.

　　As Motorola's main business, mobile phone design and manufacturing business, has recently encountered frequent embarrassments. As the mobile phone market gradually becomes saturated, how to open up new market space has become very difficult, and the market pressure is quite huge. Although Motorola has taken into account high, medium and low-end mobile phone product categories, the market is not as expected. Furthermore, in terms of wireless and broadband business, facing the increasingly fierce integration trend in the global telecommunications field, Motorola should indeed take some actions after reflection. At the same time, under the impact of Internet business, traditional telecommunications companies have adopted mergers and reorganizations to strengthen their strength and strive to have more say in the competition. How Motorola can find a development path that suits itself is very worth pondering. Therefore, shrinking the battle line, streamlining the business scope, and accumulating funds should be the first step to achieve a leap.

　　As for the partners, as one of the world's leading automotive parts suppliers, Continental has core strengths in vehicle dynamics technology and has conducted long-term exploration. In 2005, it achieved a sales record of 13.8 billion euros (17.2 billion US dollars). Continental appreciates Motorola's automotive electronic systems very much, and the acquisition of its automotive electronics department is also extremely beneficial to Continental's long-term development in the future. Experts predict that after acquiring Motorola's automotive electronics business, Continental's automotive systems division will add 1.6 billion US dollars to its current annual sales of 5.2 billion euros (6.5 billion US dollars). Therefore, this transaction is beneficial to both parties.

　　Only by not doing something can you achieve

　　something. Li Shu, a senior analyst of the semiconductor industry at CCID Consulting, said in an interview with a reporter from China Electronics News that it is wise for Motorola to get out of the automotive electronics business. First of all, the automotive electronics field is relatively closed. Although automotive electronics companies and vehicle manufacturers are closely related, their relationship is often established through years of cooperation, and once the cooperative relationship is established, it is very stable. This means that if other companies intend to break certain relationships to open up a larger market, it will be very difficult. Moreover, although Motorola's automotive electronics business is very mature at the technical level, its relationship with vehicle manufacturers is not particularly ideal, and its strategic foundation is not strong. Therefore, in the long run, a big breakthrough is unlikely, so it is better to sell it to a company with more strength to do it than to maintain the status quo. In addition, in terms of market share, automotive electronics does not account for a large proportion of Motorola's entire business. If Motorola spends its energy on automotive electronics but gets little results, it is not cost-effective for Motorola. However, selling the automotive electronics business as a whole to Continental Germany has achieved the ideal effect of a win-win situation. More importantly, Motorola will focus on wireless and broadband business in the future, so it is necessary to shrink the battle line.

　　Professor Yuan Dahong of the Department of Automotive Engineering of Tsinghua University expressed a similar view in an interview with a reporter from China Electronics News: Motorola's competitiveness in the field of automotive electronics is relatively poor. Instead of struggling to maintain the status quo, it is better to hand it over to a company that can better develop this business. The combination of Motorola and Continental is a natural outcome. Moreover, the automotive electronics market is difficult to enter. Motorola has already paid a high tuition fee, and further investment may not be effective.

　　In the face of fierce market competition, in order to seek a greater market breakthrough, Motorola has embarked on a journey of strategic adjustment.

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It seems that you need to focus on everything you do. MOTO bids farewell to automotive electronics and reinforces communications. Siemens is leaving communications and focusing on industrial fields including automotive electronics.