It’s hard to consign a once vibrant and innovative company to the technology graveyard, but Motorola is clearly in a death spiral. The company that brought us the StarTAC and DynaTAC cell phones, 6800 and 68000 series microprocessors that powered early Apple, Atari, and Amiga personal computers, invented Six Sigma quality standards, introduced the first high powered germanium transistor, not to mention key developments in television, satellite and space technology is marching toward its inevitable demise.Let’s look at its business units:

Home & Networks Mobility

An entrenched customer base in Cable MSOs, but slow development and long time horizons for installed cable boxes mean that there is not significant demand for product innovation by the cable operators or consumers, and during the downturn, cable is likely to work harder to hold customers, while having a harder time upselling new features such as DVRs etc. Motorola is clearly several generations behind any comparable home entertainment technology standard. Compare the sophistication of a Motorola to AppleTV, a product that, with its peerless DNA, has still struggled to find relevance. I have a Comcast set top box made by Motorola, with a DVR, deployed last August. It sits in a room on top of an 8 year old Sony Home Entertainment DVD/Surround Sound System. 20 feet away, on my stereo rack is a 3 year old Roku Soundbridge. The Motorola box works, but it can’t compete with the Sony or Roku for refinement or product maturity. Any of the display commands on the STB (Play, Pause) are truncated to PLA or PAU – again, this is a 2008 device. Meanwhile the Sony system has a clear, bright, and fully informative display, as does the Roku, where the florescent readout is one of the most elegant in the CE sector… from a company whose market cap is a rounding error in comparison to Motorola.

Enterprise Mobility Solutions

A possible bright spot – less commoditization, and a moat around the core business, but if the housing downturn affects municipality tax bases, then upgrades to police, fire and EMT services will be few and far between – meaning more mileage for the Crown Victoria fleets, and more hours on the existing Motorola scanners. RFID segments could be an opportunity. As the NFL season starts, we’ll be able to again see the ubiquitous Motorola logo on the coaches headsets on the sidelines, reinforced with the company name on the mic. A reassurance that there is, for the moment a pulse in Schaumberg.

Mobile Devices

As Apple and Research In Motion surf the tsunami of smartphone popularity, Motorola’s ship has sunk. Yes, the DynaTAC started the mobile phone revolution, yes, the StarTAC and RAZR were two of the most popular mobile devices of all time. But in Q4 of 2008, Motorola’s market share collapsed by 50%, now down to about 8.7% of the market. The halo around the iPhone and the Blackberry, the momentum of HTC, LG and Samsung will only serve to drive their share even lower in upcoming quarters. Even the Android OS is unlikely to help – cell phones, some 25 years into their lifespan are valued in the consumer market for the form of the device, function follows form. Further, most of the thought leadership that brought the RAZR to market has moved on, and with their market share decimated, Motorola will struggle to find the resources to innovate in R&D. And while Motorola has profited through divestiture of its divisions in the past, they will likely have to pay to unload the mobile unit.

Lastly, much has been made of Sanjay Jha’s compensation package as co-CEO – roughly $104 million, with 103.5 of that tied to equity, bonuses. I applaud the weighting of the compensation toward the success of the company, but imagine that having a co-CEO who is on a package at 25% of Jha’s will inevitably be a cause for turmoil.

With 32 teams in the NFL, you have to ask, just how many headsets would you need to sell to cover 125 million in CEO compensation?