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Solutions for workteams

BCS shipped more than 6 million digital set-top terminals in 2000, almost twice as many as in 1999. About 3 million cable modems were shipped in 2000, nearly tripling the volume from a year ago. The greatest growth potential is outside the United States, where cable penetration is lower and growing rapidly. Motorola is a leader in the emerging market for packet-based cable telephony. BCS has been selected by AT&T as its initial provider of Voice over Internet Protocol technology.

The Commercial, Government and Industrial Solutions Sector provides mission-critical and enterprise communication solutions for workteams in market segments where Motorola has always been strong - from public safety and government to transportation and commercial enterprises. Sales rose 14% in 2000, and operating margins improved to 11%. Solutions from CGISS satisfy unique needs for immediate access to information, one-to-many and group communications, customized coverage areas and call connection at the press of a button. Motorola's digital technology is based on industry and user-driven standards and has been used to connect areas and workgroups spanning an entire country.

The Semiconductor Products Sector (SPS) provides embedded chip-level solutions, while the Integrated Electronic Systems Sector (IESS) focuses on embedded system-level solutions.

SPS sales from ongoing operations grew 22% in 2000, and operating profit margins improved to 8%. Semiconductor industry sales rose 37% in 2000 but peaked in the third quarter and have slowed considerably. The slowdown is being driven primarily by customers' excess inventories coupled with the slowing economy. SPS has implemented cost-reduction plans to reflect this slower-growth environment.

SPS continues to invest in advanced technologies required for future growth and profitability. It is developing feature-rich, low-cost platforms for 2.5G and 3G products. Motorola's agreement to license the microprocessor architecture from ARM Ltd. is designed to drive our sales in the wireless market. SPS is the world leader in communication processors, vital to the networking and Internet space, and the acquisition of C-Port Corporation is enabling SPS to expand that leadership to networking processors. In the transportation segment, the semiconductor content per vehicle is growing, but weaker automotive sales in North America have slowed growth. In home networking, the sector's Streamaster broadband multimedia gateway solution, which uses digital subscriber line (DSL) technology, achieved numerous design wins.

Police officers can transmit photographs of missing children from their vehicles to a central dispatch center, demonstrating the powerful way integrated information and communications solutions are transforming the work of public service agencies.