The Rise and Fall of Motorola: A Story of Innovation and Failure

In the year 2000, Motorola was at the pinnacle of its success. The company's market value had reached nearly $80 billion, with a slew of high-tech acquisitions and new products on the horizon that seemed unstoppable. However, by 2009, things had taken a drastic turn for the worse. The company's value had plummeted to levels unseen in years, leaving many to wonder what could have gone so wrong.

A Look Back at Motorola's Early Years

To understand what happened to Motorola, it is essential to look back at its early years. The company was founded by engineer Paul Galvin and his friend Edward Stewart in 1921, in the city of Marshfield, Wisconsin. After having worked for another battery manufacturer for several years prior, Galvin and Stewart started a battery company in Marshfield that year. However, due to poor and costly shipping options in the area, the company went out of business by 1923.

Rebirth in Chicago

Despite the setbacks in Marshfield, Galvin and Stewart were determined to continue their venture. They began another battery business this time in the heart of Chicago, where they had secured a fantastic location for shipping. However, just as things were looking up, a major defect was discovered in their batteries. This setback proved too much for the company, and before it could be fixed, Galvin and Stewart's credit ran out. Their assets were seized, leaving them with nothing but debts to pay.

The Birth of Motorola

Despite facing significant challenges from an early stage, Galvin and Stewart refused to give up on their dream. They began working on a new project that would eventually become the foundation of Motorola. This project was known as a "wireless telegraph," which would allow people to communicate over long distances without the need for wires.

Motorola's Early Successes

In the early years, Motorola made significant strides in the development of its wireless telegraph technology. The company's innovation and perseverance paid off, and it became one of the leading companies in the industry. Motorola's products were used for various purposes, including military communication and broadcasting.

Motorola's Rise to Prominence

As the years went by, Motorola continued to innovate and expand its product line. The company acquired several other businesses, including a major satellite communications firm, and developed new technologies that allowed it to stay at the forefront of the industry. By the 2000s, Motorola had become synonymous with telecommunications equipment and cell phones.

The Fall of Motorola

However, by 2009, Motorola's success story had come to an abrupt end. The company's market value had plummeted to nearly $80 billion lower than it was in 2000. This drastic decline was a result of several factors, including increased competition from Asian manufacturers and the failure to adapt to changing market trends.

Sale of Motorola

In 2011, Motorola was forced to sell off its assets to the highest bidder due to financial difficulties. The company's downfall served as a cautionary tale for businesses operating in the highly competitive telecommunications industry. Despite its early success, Motorola failed to innovate and evolve with the times, ultimately leading to its demise.

A Legacy of Innovation

Despite its tragic end, Motorola's legacy lives on. The company played a significant role in shaping the modern telecommunications industry, and its innovations paved the way for future generations of technological advancements. As LGR Tech Tales continues to explore the stories of technological inspiration, failure, and everything in between, the tale of Motorola serves as a reminder that even the most seemingly invincible companies can fall victim to the challenges of an ever-changing world.

"WEBVTTKind: captionsLanguage: enIn the year 2000,Motorola was monumental.With a market value of nearly $80 billionand a slew of high-tech acquisitionsand new products on the horizon,they seemed unstoppable.But by 2009,things had gone so wrong so fast,that the company's value hadplummeted to levels unseen in years.And by 2011, they had to sell off the company in chunksto the highest bidder.For a business that had beenaround since the early 20th century,and had survived economichardships, multiple warsand even an unsolved murder,this was an ending that few saw coming.What happened?This is LGR Tech Tales,where we take a look at noteworthy stories of technological inspiration,failure and everything in between.The episode tells the tale ofthe telecommunications giantknown as Motorola.Motorola's story begins wellbefore the age of cell phonesand telecommunications equipmentthat they were known for in the 2000s.To tell their tale, we need togo all they way back to 1921,to the city of Marshfield, Wisconsin.Engineer Paul Galvin andhis friend Edward Stewartstarted a battery company in Marshfield that year,after having worked for anotherbattery manufacturer some years prior.Marshfield was selected because of a deal theyworked out with the local chamber of commerce,but before long it proveddisadvantageous due topoor and costly shipping options in the area.By 1923, the company went of out business,and after a short stint workingat a local candy company,Galvin and Stewart began another battery business,this time in the heart of Chicago.The location was fantastic for shippingbut soon a major defect wasdiscovered in their batteries,and before this could be fixed,their credit ran out and their assets were seized.However, Mr. Galvin was not giving up,because before the company shut downthey were developing somethingcalled a \"dry battery eliminator.\"The concept seems simple today,but it let you take a home radio,plug it into an electrical socket,and accept electricity directly from the grid,no battery required.The creditors now ownedthe rights to this device,but they were going up forauction in the fall of 1928,and Galvin went for it.He won back all rightsto the eliminator for $750and promptly founded yetanother company in Chicago,this time with his brother Joe,called the Galvin Manufacturing Corporation.All they made at first wasthe battery eliminator, butfinally it seemed that luck was on their side.The eliminator did wellenough to make a decent profit,and they used that money tobuild something new in 1930that would change the courseof the company's history.This was the Motorola Radio,the first mass-produced commercialradio made specifically for automobiles.The Motorola name was meantto imply \"sound in motion,\"with \"motor\" bringing tomind cars and movementand \"ola\" being inspired by the names ofsimilar audio devices on the market,like the Radiola and the Victrola.Galvin Engineering was profitable enoughto break even after a year of selling the new radio,and eventually the successprompted a name change.From 1947 onward, the companywould be known simplyas Motorola.But even with the Motorola device taking off,it was no smooth sailing.For one thing, the Great Depressionwas ongoing in the early 30s,so sales were never exactly booming.Then in 1933, a newMotorola model was introducedbut with tons of problems,which resulted in them havingto recall thousands of units.There was no usecomplaining about it, though,and Paul Galvin just piled up the recalled unitsand smashed them with a sledgehammer.Besides, two new models were on theway for 1934 without the earlier issues,and the business was getting back on track.In 1936, they introduced theMotorola Police Cruiser radio receiver,which was a one-way radiodesigned to receive police broadcasts.Then in 1940, they released theSCR-300 and SCR-536 two-way radios,the Handie-Talkie and what iscolloquially known as the walkie-talkie.With the international conflict of whatwould become World War II on the horizon,Galvin's company was in a lucrative position,since the walkie-talkiewas a vital piece of kit.However, the next few years were rather grim.I'm not just talking about the war.The company was doing fine,but life at home was another story.Paul Galvin's wife, Lillian,and their maid, Edna,were both murderedby an unknown intruder in their home,while Paul was away inWashington on a business trip.The murderer was never foundand the crime remains unsolved to this day.And soon after that,Joe Galvin died,leaving Paul's son, Robert,as the sole heir to the company.But even under the shadow of these tragedies,Motorola continued to grow throughout the '40s,introducing their first television in 1947,and then the germanium transistorfor car radios in 1955.Alongside Paul stepping down as president,and his son, Robert, taking over in 1956,this transistor proved to bea turning point for Motorola.While had been kind of hesitantto enter this emerging market,Robert was a firm believer in the new tech.Transistors were rapidlyreplacing vacuum tubesand gobbled up far less interms of power and space.This led to smaller, more capable electronics,like their 1960 Astronaut television,which was the first large-screentransistorized cordless portable TV.It also allowed for smaller andmore powerful radio transponders,like the Motorola radios famouslyused by Apollo astronautsto communicate with Earth from the Moon.And after the space racecame a new era in computing,spurred on by the commercialintroduction of the microprocessor.Of course, Motorola had their owntake on the microprocessor in 1974,the 8-bit MC6800.Not only was this an important chip in its day,being used in everything from industrialequipment to communication systems,but its development led to theiconic MOS Technology 6502,perhaps a story for another day.Around the same time themicroprocessor was taking off,Motorola started work on what wouldbecome the first portable cellular telephone.In April of 1973, they made the firstcalls using a system called DynaTAC,or Dynamic Adaptive Total Area Coverage,in New York City.It took a while for the technology to improve enoughto become viable for the commercial market,but in 1984, the Motorola DynaTACphone was released to the public.This was the beginning of a new era for the company.Gone were the car radios of old.They stopped making those in 1987.It was the late-20th century telecomand personal computer revolution,spearheaded by Motorola's brick cell phones,the powerful and omnipresent 68000 series CPU,and beltclip pagers.Yes, pagers,or beepers as some called them,which Motorola introduced in 1986 with the Bravo,a model that would soon becomethe number one pager in the world.They especially became associatedwith doctors in the later years,but for a while in the '90s, theywere the must-have fashion itemfor anyone that was technologicallyinclined or just wanted to look awesome.It took a bit more time for cell phonesto catch on to the same degree,but once the logistics were sortedand the electronics matured,Motorola was once again the cream of the crop.By 1994, 60% of the mobilephones sold in the United Stateswere made by Motorola,and it looked like they could not be beaten.Ah, but if it weren't for thosemeddling kids at Nokia!Due to a combination of cellphone service partnerships,keeping manufacturing costs low andgoing with bomb-proof build quality,Nokia surpassed Motorolaas the most popular manufacturerof cell phones in 1998.And while they may have lostthe cell phone battle to Nokia,Motorola still managed to grow totheir highest valuation ever in 2000at $78.5 billion.This was partially due toRobert Galvin's son, Chris Galvin,who became CEO in 1997.By focusing on emerging technologies like GPRSand making key acquisitions like the buyout ofGeneral Instrument for an $11 billion stock swap,Motorola was in a good position to dominate the 2000s.The problem...was the 2000s.First, there was the tech and dot-com bubble burst,which tore Motorola's stock down by 40 percentin a few short years.Then the 9/11 terror attacks inNew York City and the SARS scareput a huge damper on the company'sinternational supply chains.In 2001 alone, Motorola's revenuesplunged by nearly $8 billion,56,000 employees were let go andplants were closed all over the place,and it culminated with Chris Galvinbeing shown the door in January of 2004.But just months later,a project that Chris Galvin hadbeen overseeing hit store shelves:the Razr V3 flip phone,which once again led Motorolato capture the imaginationand the wallets of themainstream public in a big way.Its aluminum body was stylish,lightweight and straight up cool,and a lot like the pagers of the '90s,everyone just had to have one.Motorola Razrs were the must-have item,selling over 130 million units altogether,and the company rose backup to a $53 billion market capby 2006.Ah, but if it weren't for thosemeddling kids at Apple!Storming onto the scenewith the iPhone in June of 2007.It's amusing in hindsight, butcritics were quick to dismiss the costly device,but once it became the best-sellingphone worldwide a few years later,everyone's tone quickly changed.Motorola was slow to adapt tothis cataclysm in the marketplace,and it's no coincidence that after 2006the company's valuation took a nosedive,resulting in a restructuringannouncement in 2008.In 2009, Motorola introduced their Droid smartphone,by working closely with Google andusing the Android operating system.Thanks to this device, the phonedivision was making a profit by 2010.And it might have stayed that way if itweren't for those meddling kids at Samsung!The dominance of theirGalaxy line of Android phonesall but shut Motorola outof the smartphone market.And in 2011, the company split announcedduring the restructuring of 2008 took place,which resulted into themturning into Motorola Mobility,the mobile phone company,and Motorola Solutions,the enterprise and radio communication company.By August of the same year, the Mobilitycompany ended up being acquired by Google,with Lenovo then purchasing it from Google in 2014.The Solutions company, which many considerthe true successor to the Motorola of old,continues to operate of out Chicago,although large portions of the businesshave been sold off to various companies,like Zebra Technologies.And that's the story of Motorola.A larger than life pillar in therealm of business and technology,foiled by everything from internal strugglesto the world stage at large.It may no longer be the family-run companyit was for the better part of the 20th century.Indeed, it is no longer a unified company at all.You may still see products bearingthe Motorola name out there,with Mobility making Lenovo phonesand Solutions making radios for UKemergency services under Airwave,but the old school Motorola is long gone.Their story remains to be learned from, though,with the insurmountable odds the company facedand the far-reaching influence theyhad becoming the stuff of legend.And without them,there's no telling what thetech world would look like today.♪♪And, yeah, it doesn't look like they're gonna be re-releasing the Razr at all,even though those videos a littlewhile back seemed to imply that.Oh, well!If you enjoyed this video at least,then perhaps you'd like to see some of my others.I've got some Tech Tales on other similar topicsand things that aren't so similar, socheck it out if you'd like.Or you can just subscribe and be notified of things,you know, that's just what you do on YouTube.And support me on Patreonif you would also like that becausethese Tech Tales are a directresult of the support over there.Thank you so much to those that have donatedand made this stuff possible.And as always, thank you very much for watching.\n"