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Embedded electronic solutions

IESS focuses on automotive electronic subsystems, embedded high-availability board-level computer systems and portable energy systems. Sales increased 16% in 2000, while operating profit margin declined to 7%. IESS is investing heavily in Telematics, which began as an automotive safety and security offering and is rapidly evolving into the fundamental way to seamlessly connect the vehicle to the rest of the world. Motorola has shipped more than 1.5 million Telematics framework components since January 1999. Telematics can encompass services ranging from voice portal Internet access to navigation. The sector's Computer Group is a leader in the embedded solutions telecom market segment. Its family of products provides manufacturers with high-reliability, fault-tolerant systems for their customers who need continuous access, day or night.

Outlook Despite a sharp slowdown in the growth of the overall economy that began in the latter part of 2000, we expect demand for wireless, broadband, and workgroup equipment and services to grow as individuals continue to be attracted to broadband's triple play of voice, data and multimedia and the convenience of portable communication products. Growth in embedded devices has slowed in most segments, but we believe the demand for embedded systems that make our customers' products simpler, safer, smarter and more synchronized will remain strong in the long term. Business customers are assessing the recent changes in global debt markets and capital availability as they determine their near-term capital investment plans. The level of business activity for companies like Motorola over the next year will be determined largely by the success of further change in fiscal, monetary and regulatory policy worldwide. We are still in the early phase of this change in the economic cycle. Therefore, its pace and direction is not firmly predictable. Motorola has managed successfully through economic cycles in every decade since its founding in 1928. We remain more enthusiastic than ever about the benefits to society and our stockholders of wireless, broadband, Internet and embedded solutions tailored for the person, workteam, home and automobile.