MSI Motorola Solutions Inc

Motorola Solutions Inc. (MSI) is further downsizing its wireless broadband infrastructure solutions businesses. Yesterday, the company announced that it has reached an agreement with private equity firm Vector Capital to sale its Point-to-Point (Orthogon) and Point-to-Multipoint (Canopy) wireless infrastructure assets. The financial terms of this deal is undisclosed. However, the divestment is expected to be closed by the end of September 2011, subject to customary regulatory approval.

Earlier in April 2011, Motorola Solutions was able to sell most of its wireless broadband infrastructure assets to Nokia Siemens Networks for $975 million after fighting a prolonged legal battle with Huawei Technologies in China regarding intellectual property rights. Nokia Siemens Networks is a 50-50 joint venture between Nokia Corp. (NOK) and Siemens AG (SI). However, Motorola solutions kept its iDEN business and other selected assets and almost all the patents related to the wireless network infrastructure business.

We believe further disinvestment of wireless broadband assets is a move on the part of Motorola Solutions to concentrate more on its core public safety businesses. Motorola Solutions is the largest developer of the public safety products commanding nearly half of the total market in the U.S. The company is also the largest manufacturer of barcode readers and small rugged mobile computers. Motorola Solutions’ business strategy to focus only on stable government enterprises will help the company to continue its solid performance in the near future.

Vector will operate these businesses as a single standalone company called Cambium Networks. Motorola Solutions will now purchase broadband products from Cambium, which will be required to install its major public safety networks. Undoubtedly, at present, the most significant catalyst for Motorola Solutions is the proposed installation of 4G LTE networks for public safety. The U.S. government’s approval to prioritize the 700 MHz D-Block spectrum for public safety purposes will enhance this business.

 
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