Before it split into two independent bodies, Motorola, Inc. was established in 1928 as the Galvin Manufacturing Corporation by brothers Paul and Joseph Galvin. Its first product was a battery eliminator, but the device that put the company on the map was the car radio called Motorola. The firm steadily grew and ballooned, increasing its product lines to television sets, two-way radios, cellular phones, and electronic devices.
It was the first recipient of the 1988 Malcolm Baldrige National Quality Award, an award honoring the company’s leadership in quality products and services. The brand’s growth also put it on the Fortune 500 list as the 23rd biggest US public company in 1994, with a $22 billion revenue and profit of nearly $2 billion.
Galvin Manufacturing Corporation
This long-standing company began with Paul V. Galvin, born in 1895 in Harvard, Illinois. After retiring as an artillery officer during the First World War, Galvin entered the Illinois Institute of Technology. In 1928, Paul Galvin and his brother, Joseph, founded the Galvin Manufacturing Corporation. Their company’s first product was the battery eliminator, a device that connected direct-current radios to the alternating current popular in most US households.
In 1930, the Galvin Manufacturing Corporation launched and mass-produced a low-cost car radio called Motorola. The name came from the term “motorcar” and “ola,” a prevalent ending for most company names at the time. This affordable and widely accessible product boomed in popularity, pushing the company to dive deeper into the radio industry. A few years later, Galvin Manufacturing began diversifying its products, releasing home tabletop radios and the first car radio with push-button dialing.
In the Great Depression, the firm cut two-thirds of its workforce. The brothers also took work from other firms while their workers were on strike. The Second World War in 1940 tested the company’s innovation once more. Paul Galvin focused on researching and producing technology the military could buy and use. It led to the creation of the Handie-Talkie two-way radio, followed shortly by the Walkie-Talkie, two of the most central pieces of communications equipment in WWII.
Police cars in Philadelphia, Pennsylvania, were also the first to use the Motorola FM car two-way radio system. Later, Yellow Cab Co. taxies in Cleveland, Ohio, began using the brand’s first commercial FM two-way taxi communications system. The brand continued to release another similar tech for other industries and services throughout the United States.
Going Public and Expansion
Galvin Manufacturing began to sell stock publicly in 1943. After four years, the brothers change their company name to Motorola, Inc. In the same year of the rebranding, the company’s net sales doubled to $46.6 million from $23.2 million in 1946. Its net earnings increased dramatically from $656,396 in 1946 to $2.5 million in 1947. Key players in Motorola’s future development, engineer Daniel Noble and Robert Galvin, Paul Galvin’s son, joined its ranks at this time.
With the war ended, the firm redirected its product focus to entertainment devices and electronics. The Golden View, the brand’s first television set, entered the market at a much lower price than its competitors. It was also compact, which attracted many consumers to buy it, pushing the company to become the fourth-largest television seller in the United States.
When Bell Laboratories created the transistor in 1948, the firm formed a group for developing semiconductors. The initial result was a three-amp power transistor. The brand also began supplying transistors to other companies that sold and used its products, effectively selling parts to competitors.
The 1950s was another vital year for the tech brand because it established many novel features in television technology. For example, it found a way to reduce the 41 tubes in black-and-white TV sets to only 19. The venture began when the firm used a colored television design by Columbia Broadcasting System (CBS). The project didn’t launch as intended when the Federal Communications Commission (FCC) rejected it in favor of the system made by the Radio Corporation of America (RCA).
Acquisitions and Deals
Before 1947 ended, Motorola acquired Detrola, an automobile radio manufacturer for the Ford Motor Company. A condition of the acquisition stated that the manufacturing contract with Ford should remain, which only reinforced Motorola’s car radio business. It soon supplied 50% of the car radios for Ford and Chrysler and 100% of automobile radios for American Motors.
The company also bought and sold several other firms throughout the 1960s into the 1970s. The first was Lear Inc’s Lear Cal Division, an aircraft radio manufacturer, which Motorola sold shortly after the purchase. The next acquisition and then divestment was the hearing aids manufacturer Dalberg Company. Other acquisitions included firms in the funeral home, chemical, broadcasting, and recreation industries.
Without these smaller acquisitions, Motorola wouldn’t expand its operations beyond the US and instituted progressive marketing policies. The organization also gradually discontinued manufacturing consumer products in favor of fabricating high-tech electronic components. Another example is the Codex acquisition in 1977 for an exchange of stock over $80 million.
The next big thing for Motorola occurred when it bought the California-based computer and terminal manufacturer Four-Phase Systems, Inc. for $253 million in 1981. While Four-Phase was a failing and dying business, Motorola saw great potential in this custom computer manufacturer. With Codex and Four-Phase, the company could finally enter office automation and distributed data processing fields.
Business Troubles
Trade Wars with the Japanese
Starting from the early 1976s to the late 1980s, the company began developing cellular or mobile phones. However, the brand didn’t commercialize its first cellular telephone network operation until 1983, after $200 million and 20 years in development. Its troubles began when it encountered licensing and construction problems. Users also complained about its phone’s reliability and quality, often comparing them to Japanese-produced remote phones.
When Japanese companies cut their mobile phone prices and sold them in surplus to the US to gain a large market share, Motorola requested sanctions against these companies. The US barricaded eight Japanese companies from “dumping” their surplus products to the US market, making Motorola the top cellular phone supplier globally.
Despite this, it still attempted to set deals with Japanese companies. However, when the firm released the world’s smallest portable phone, Nagoya and Tokyo barred the product, denying Motorola 60% of the $750 million Japanese mobile phone market. The brand went to the US government to complain, forcing then-President George Bush to publicly accuse the Japanese of unfair trade. He also threatened to take action if the nation didn’t remove barriers to free trade.
Surviving the Tech and Telecom Crash
In the mid-1990s, Motorola was one of the leading mobile phone brands. Yet, after a few years, its Finnish rival Nokia overtook the American brand and became the world’s largest mobile phone maker. On top of the competition, its Iridium satellite system, made in 1980 to provide universal coverage, declared bankruptcy. The company had to sell it for $25 million, a far cry from its initial $5 billion investment.
The 2000 tech and telecom crash caused the brand’s price to fall almost 40%. The 2001 World Trade Center attacks followed, succeeded by the 2002 SARS scare, which slowed its international supply chains and caused sales to crash. Its revenues sank by almost $8 billion, and its losses reached almost $4 billion.
Then-CEO and Chairman Chris Galvin had to cut 56,000 employees and close plants, including a new $90 million plant. He developed and marketed a new digital phone, the Razr. He didn’t keep his position long enough to see it launch. Because of the recent events, the board fired Chris, removing the Galvins from the business. Months after Galvin left the company in 2005, the Motorola Razr hit the market, selling 50 million units in its first two years.
However, it lost $4.3 billion from 2007 to 2009, forcing the long-standing company to split into independent companies in 2011. Motorola Mobility LLC continued the cellular telephone and home networking business. This spin-off, headquartered in Chicago, Motorola Mobility, became a Google acquisition in 2012 for $12.5 billion and then a Lenovo subsidiary in 2014 for $2.91 billion. Motorola Solutions took over the business and government fields as the original brand successor, assembling computer networks and manufacturing two-way radios. The latter has its headquarters in Schaumburg, Illinois.
COVID-19 Response
Both Motorola successors suffered losses during the pandemic but soon rebounded after a year. Motorola Solutions responded with sanitation, health, and social distancing measures.
We couldn’t find further information on the two companies during the pandemic.
Motorola’s Successors Today
Motorola Mobility runs in the consumer electronics industry. It has expanded its mobile phone and television lines to include smartwatches and accessories. The enterprise-oriented Motorola Solutions entered the telecommunications equipment field, offering mission-critical communications, command center software, video security, access control, managed, and support services. Its products have expanded beyond police radios to include body cameras, push-to-talk LTE devices, and video security systems.
