Motorola Solutions CEO Brown: ‘LMR is here to stay’
Motorola Solutions Chairman and CEO Greg Brown expressed optimism about the company’s future in the critical-communications space, specifically noting the ongoing strength in its land-mobile-radio (LMR) offerings and growth in the command-center arena, as well as video security and access control.
Speaking at the Raymond James Institutional Investors Conference on Tuesday, Brown cited the company’s past leadership in the LMR industry and reiterated his belief that the company’s future in providing private-radio solutions to public-safety and enterprise entities remains bright.
“Land mobile radio is the anchor tenant—that’s what the residual identity of the company is—but why am I optimistic about that?” Brown said during the conference interview, which was webcast. “Number one, the durability and predictability of that as a line of business, and I don’t see it being displaced or replaced.
“We have contracts that run through 2035, 2037, and we’re in conversations right now on a multi-services deal through 2041. So, LMR is here to stay.”
Brown acknowledged that the LMR market may only be growing at a “single-digits” pace, but he said that Motorola Solutions has become much more adept strategically in its approach with customers, which allows the company to provide broader solutions and maintain profit margins.
“We have 13,000 LMR networks—the majority are enterprise, not public safety,” Brown said “If you put in that footprint, then you add devices—i.e., radios—and then you monetize services around that, as well,” the overall growth remains healthy for the company.
“We used to sell iron [hardware], and that was it,” he said. “We now have a services business that is $2 billion-plus [in annual revenue] and very healthy. We are much more strategic and thoughtful around monetizing … bronze-, silver- and gold-level services. We’re much more thoughtful on the terms and conditions of cost-of-living increases, so we’re not going to bear the burden in an inflationary environment unnecessarily.”
Brown said he is encouraged by the adoption of Motorola Solutions subscriber devices, noting that he believes that customers “are in the early innings of refresh” of LMR mobiles and portables.
“You replace your smartphone maybe now every three years,” Brown said. “The replaceability of a public-safety radio is about seven years, and we have now launched the best radio we’ve ever had in APX NEXT for primarily North American P25 subscribers.
“We have a new TETRA radio for international, and we have a new radio for commercial users around PCR—professional commercial radio.”
In the command-center space, Motorola Solutions is the market leader in call-answering and records-management solutions, but Brown stated his belief the company’s offerings remain “nascent’ and that “there’s an enormous amount of room to run” in the future.
Motorola Solutions has seen its stock price more than double since May 2020, even through the company effectively exited the world’s largest market—China—several years ago. Today, Brown said he believes that decision could help fuel Motorola Solutions’ growth in the future.
“We’re not in China,” Brown said. “For the most part, we don’t have to sell our products into China. So, the other reason I’m optimistic is that Huawei, ZTE, Hytera, Hikvision and Dahua are banned in the U.S. through the National Defense Authorization Act.
“There’s also commercial reticence to deploy those same five [Chinese companies’ products] here in the U.S. Then you go to the Five Eyes partners of the UK, Australia, Canada and others, and there’s concern around having Chinese electronics, Chinese software and Chinese communications in public safety, enterprise security or critical infrastructure.”
Beyond exiting China, Motorola Solutions also has pursued litigation against China-based firms—efforts that Brown noted during his presentation.
“Motorola was the first company to go into China in 1986. We were one of the first to exit years ago. We sued Huawei, and we’re in our second lawsuit with Hytera.
“We’re the only U.S. multinational ever to sue two Chinese companies, and we’re in our seventh year pursuing Hytera. We have won, and now we have to collect [awards from civil-court victories against the China-based LMR manufacturer]. We’re going to collect. We’ll see how much, but we will pursue them to the ends of the earth.”
The AT&T debacle of last week, sure enforces Motorola’s optimism about LMR. It should be getting clear that public safety entities need to own and control their networks if they want them to always be there and always perform. These networks can be augmented with services like Firstnet, but should be able to continue to perform if the network service fails. Some disasters leave only mobile and portable radios and no infrastructure. When that happens, LMR isn’t the main thing; IT’S THE ONLY THING!