avatar Motorola Solutions, Inc. Manufacturing
  • Location: Illinois 
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    Motorola, Inc. 2003 Annual Report Why Motorola? Why now? What’s next? Good questions…the questions same ones I asked before becoming Motorola’s new Chairman and CEO. My answers: Motorola is a great global brand with even greater potential. It’s the original high-tech startup, with over 75 years of world-changing innovation, a rich portfolio of patents, an amazing team of technologists and a passionate commitment to R&D. It’s a company built by engineers, visionaries and those who are both. No company is more strongly positioned to make new technologies converge to create compelling new possibilities for the home, the automobile, mission-critical mobile, the enterprise enterprise, and the device formerly known as the cell phone. phone Our belief: Intelligent products can unleash personal potential. Make the world smarter. Simpler. Easier to navigate. More productive. More fun. challenge Convert our strengths into growth and a high level of financial return to our stockholders. In our world of Intelligence Everywhere™… Our challenge: I see opportunity everywhere.

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    Opportunity: Connect, Lead, Grow We keep the word flowing to the right folks in the right places. Motorola is a global leader in wireless, automotive and broadband communications. Intelligence Everywhere ™ really means opportunity everywhere. But where is everywhere? As consumer choice gets broader, as devices get smarter, as the world and everything in it get more connected, Motorola is everywhere: automotive electronics and telematics systems commercial and industrial communications embedded computer systems embedded microprocessors government and public safety communications personal communications portable energy products wireless telecom networks wireless and wired broadband networks This is how we performed everywhere… I invite you to take a look at the new Motorola and its opportunities everywhere.

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    40 Net Sales 30 (dollars in billions) 20 10 0 2,000 (Loss) 0 (dollars in millions) -2,000 - 4,000 -6,000 .75 (Loss) 0 Per Share (in dollars) -.75 -1.5 -2.25 99 00 01 02 03 2003 Net Sales by Business Segment (before intercompany eliminations) Financial Highlights Personal Communications Segment Semiconductor Products Segment Years ended December 31, 2002 Dollars in millions, except per share amounts and as noted Global Telecom Solutions Segment Net sales $ 27,058 $ 27,279 Commercial, Government & Industrial Solutions Segment Operating earnings (loss) 1,084 (1,813) Integrated Electronic Systems Segment % to sales 4.0% (6.6)% Broadband Communications Segment 2% Other Products Segment Earnings (loss) before income taxes 1,293 (3,446) % to sales 4.8% (12.6)% Net earnings (loss) 893 (2,485) % to sales 3.3% (9.1)% Diluted earnings (loss) 2003 Market Sales by Region per common share 0.38 (1.09) Research and development expenditures 3,771 3,716 Capital expenditures 655 607 Year-end employment (in thousands) 88 97 United States Europe China Asia-Pacific Latin America Other Markets 3% Japan 1 Motorola, Inc. 2003 Annual Report

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    Opportunity: Third Generation Wireless Services (3G) Sales for 3G handsets are expected to grow rapidly in 2004 – with current estimates of more than 15M 3G handsets being sold to consumers in 2004. source: Motorola Business Intelligence Where is everywhere? Everywhere is wherever you are. It’s in your life. It’s in your hand. It’s in your pocket. It’s in your fun. It’s in your games. It’s what you hear, what you see and what you share… Personal Mobile Broadband is the next big thing in wireless communications. We are making Third Generation (3G) wireless services a reality with Hutchison 3G UK Limited. With the new Motorola A920 color screen handset consumers can: 2 Motorola, Inc. 2003 Annual Report

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    Opportunity: Push-To-Talk over Cellular 51% of mobile handset users worldwide who do not already have Push-To-Talk say they want it! source: Motorola Business Intelligence The world would not be wireless without portable energy…Motorola Energy Systems is one of the world’s largest independent suppliers of battery packs for portable devices. Push 2 Talk Push 2 Music Push 2 Pictures Push 2 Data Not 2 far in the future. We are bringing our Push-To-Talk leadership to Cellular for CDMA and GSM networks. what telecom operators need in their networks + the features consumers want in their handsets Motorola V400p Motorola wireless communications technology is behind the scenes. Push-To-Talk over Cellular with style and flair! Retail availability is expected in June 2004 need style want flair Motorola, Inc. 2003 Annual Report 3

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    Opportunity: Mobile 66% of mobile handset users say they want an integrated digital camera with their next purchase. source: Motorola Consumer Insights and Intelligence New! Motorola HS810 hands-free wireless Bluetooth* headset *Bluetooth…cutting-edge wireless protocol for connecting mobile devices. Originally triplets, our family’s expanded to quads, the Motorola V300, V400, V500 and V600....................... and…more siblings are on the way! Each is built on Motorola’s i.250 chipset. Now, this is manufacturing efficiency deluxe! This common hardware and software platform includes: large color display Bluetooth ® technology capabilities flash memory VGA camera intuitive user interface 4 Motorola, Inc. 2003 Annual Report

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    Opportunity: Networking Motorola sells equipment to 13 of the top 18 telecom network operators worldwide. source: EMC Database March 2003 Big Business in China! Over the past several years, China Mobile Communication Corporation (CMCC), one of the largest mobile operators in the world, has consistently chosen Motorola to build out its network. The latest contract deployment will prepare CMCC for the evolution to 3G and the applications it can deliver to its customers. Motorola is also expanding and upgrading the networks of China United Telecommunications Corporation (China Unicom), another of the world’s largest mobile operators. The Motorola SoftSwitch represents a new paradigm in switching technology. Benefits to network operators include reduced operating costs, easy upgradability and migration capability to technologies that support voice, data, video and Push-To-Talk over Cellular applications: requires less space and power to operate compared with legacy switches is faster and easier to deploy than legacy switches takes the operator to the world of multimedia data applications Commercial SoftSwitch Deployments: Portugal_RadioMovel + India_Tata Teleservices, Ltd. Motorola, Inc. 2003 Annual Report 5

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    Opportunity: Mission-Critical Communications From complex wide-area communications and information systems to a small enterprise – our opportunities are broad and deep. They include solutions for: Public Safety Police, Fire, Emergency Medical Services Government Municipal Services, National Ministries, Federal Agencies, Military Utilities Gas, Water, Electric, Telephone Transportation Airlines, Transit, Railroad, Courier Manufacturing Automotive, Industrial, High-Tech, Aerospace Other Enterprise Construction, Petrochemical, Retail The portfolio of solutions we offer our customers ranges from complex to simple.The Motorola PR400 two-way radio addresses the needs of small businesses. The Motorola MTH650 Dimetra system radio addresses the needs of customers implementing the TETRA standard. We are the leading provider of digital two-way radio communications equipment worldwide. That’s more than 750 digital systems installed in more than 65 countries. In your building In your company In your small business In your offi ce In your town In your nation In your world Motorola’s innovative software applications in a centralized 311/Customer Service Request System help the City of Chicago deliver services efficiently to its residents. 6 Motorola, Inc. 2003 Annual Report

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    Opportunity: Meeting and Exceeding the Standard Motorola is the only provider delivering communications and information systems compliant with both industry digital standards, TETRA and Project 25 Connect To Protect Motorola is a leader in providing hometown and homeland security communications solutions. In Phoenix and Mesa, Arizona, Motorola is implementing a regional, multi-agency Project 25 digital communications system, providing interoperability for government agencies to communicate effectively in emergencies. According to the United States Department of Homeland Security, new or upgraded systems should be compatible with the Project 25 standard. This is Hong Kong Let the games begin Motorola at the Olympics: Munich 1972 Olympics Los Angeles 1984 Motorola* was selected to provide the secure two-way radio Sarajevo 1984 Calgary 1988 communications system for use during Athens’ 2004 Olympic Games. Lillehammer 1994 The system will be used after the Games by Greek police, Atlanta 1996 Sydney 2000 fire brigade, ambulance and coast guard services. Salt Lake City 2002 Athens 2004 *Working with Science Applications International Corporation (SAIC) and Siemens nd s ki of it h e fir s t m eric a n T A tio or th r ma s haring in N e s info bl and ena n a t ion ’s rdi it y . coo g the c ents n r tm amo s d epa o u va r i r ve d . ce s e Justi Motorola, Inc. 2003 Annual Report 7

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    Opportunity: Everywhere Worldwide! 349 million TV households in China 173 million TV households in Western Europe 106 million TV households in U.S.A. 77 million TV households in India 47 million TV households in Japan 40 million TV households in Brazil source: IMS RESEARCH, 2003 Everywhere It’s in your home, in every room. It’s on your television. It’s in your telephone. It’s digital. It’s broadband… and Motorola’s in everything broadband. It’s happening. Right now. now It’s the 21st century. It’s time to live like it. Our Wireless Home Networking solutions do exactly that, keeping people informed, connected and entertained leveraging the power of the broadband pipe in the home + office. The Motorola MS1000 Media Station platform enables consumers to build an advanced broadband network inside the home, complete with file sharing, digital music and media streaming along with the ability to run additional applications offered by a broadband service provider. Motorola Home Monitoring and Control Our portfolio of advanced broadband applications enable people to stay connected to their homes even when they’re away. Remotely monitor security security, control heating, cooling and lighting through any Web browser. The Motorola HM1000 Home Monitoring and Control System provides everything you need need, including software and wireless camera. Amazing. And amazingly easy. 8 Motorola, Inc. 2003 Annual Report

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    Opportunity: HDTV Worldwide HDTV shipments in 2003: 8 million Worldwide HDTV shipments in 2007: 27 million projected source: IMS RESEARCH, 2003 The first specification for HDTV in 1990 The first commercial deployment of digital cable in 1996 The first digital set-top to integrate HD and DVR in 2003 We developed and delivered the first system on which today’s broadband industry is built. Now Motorola is: Video on demand, HDTV and more = MOTOROLA Number One in digital set-top shipments Number One in cable modem shipments Number One in digital headend/encoders the connected home High Definition is changing how we see TV. Experience the crispest picture and clearest sound available today with the Motorola DCT6208 High-Definition Cable Receiver. Be ready for the advanced interactive features of tomorrow’s HDTV. WiFi is Surging! 22.7 million WiFi NIC cards and access points rolled out last year, an astounding increase of 215% versus 2002’s 7.2 million units shipped. source: IN-STAT/ MDR Motorola, Inc. 2003 Annual Report 9

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    Opportunity: Automotive The automotive electronics industry is growing at a rate triple that of the automotive industry itself. source: Motorola Business Intelligence BMW Our electronics are found in automotive brands What we make in the automotive market : telematics systems engine control units braking system sensors global positioning systems powertrain electronics SAIC Chery tire pressure sensors Tianjin Automotive interior electronics transmission controls and the list goes on… Wuling The automotive electronics market continues to grow and Motorola is an industry leader. Our technology makes your time on the road safer + smarter. Every day! Other things we do: Telematics 66 models and millions Driving directions Cool, Calm and Connected of subscribers enabled by Motorola Navigation Remote diagnostics Remote door unlock Entertainment Concierge Hands-free calling Vehicle theft tracking Emergency assistance Smart, Safe and Secure Airbag deployment notification Autonomous cruise control Side-object detection Lane departure warning Lane change support Vehicle workload manager 10 Motorola, Inc. 2003 Annual Report

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    Opportunity: Leveraging Our Lead As a leading global semiconductor company we provide embedded processing and connectivity products Mobile to large markets, such as the automotive, networking and wireless communications industries. In essence, our processors add the smarts to: Reliable telecom networks internet routers cellular phones digital cameras mobile games personal digital assistants antilock braking systems airbag sensors and thousands more… In essence, our processors add the smarts to: Global Invisible telecom networks Internet routers mobile phones mobile games personal digital assistants factory & home automation taking future further antilock braking systems airbag sensors and thousands more… Motorola is the market leader in embedded computer systems for the communications industry. source: Venture Development Corporation, 2004 Micro Agile We believe we have shipped more embedded processors than any other company w o r l d wi d e . #1 global market share in semiconductors for automotive applications according to Strategy Analytics in communications processors according to International Data Corporation (IDC) in radio frequency power products for cellular base station markets. according to Allied Business Intelligence Pioneered Magnetoresistive Random Access Memory (MRAM) Copper interconnect Silicon-on-insulator Silicon germanium carbon We make wireless smart. Our i.MX family of application processors make the communication devices of tomorrow a reality today. More than 50 million shipped…wow! Motorola, Inc. 2003 Annual Report 11

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    Directors Standing for Election to the Motorola, Inc. Board of Directors Edward J. Zander Chairman of the Board and Chief Executive Officer, Motorola, Inc. H. Laurance Fuller Retired; formerly Co-Chairman, BP Amoco, p.l.c. Judy C. Lewent Executive Vice President & Chief Financial Officer, and President, Human Health Asia, Merck & Co., Inc. Walter E. Massey President, Morehouse College Nicholas Negroponte Chairman of Media Laboratory, Massachusetts Institute of Technology Indra Nooyi President and Chief Financial Officer, PepsiCo, Inc. John E. Pepper, Jr. Vice President, Finance and Administration,Yale University; Retired Chairman & CEO, Procter & Gamble Company Samuel C. Scott, III Chairman, President and Chief Executive Officer, Corn Products International Douglas A. Warner, III Retired; formerly Chairman of the Board, J.P. Morgan Chase & Co. Dr. John A. White Chancellor, University of Arkansas Mike S. Zafirovski President and Chief Operating Officer, Motorola, Inc. Intelligence Everywhere . ™ It’s a promise. it’s our mission. Not to sound too dramatic , Now is our time. We will leverage the power of a revitalized brand, terrific talent, a rekindled spirit of innovation and extraordinary execution to delight customers across the globe. As we have tried to illustrate in this report, our skills, our strategies and our technologies align remarkably with where the world is going. In 2004, you will feel energy and urgency as never before from me and every single member of the Motorola team. Edward J. Zander Chairman of the Board and Chief Executive Offi cer Motorola, Inc. 12 Motorola, Inc. 2003 Annual Report

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    Our10-K available at www.motorola.com/investor Motorola, Inc. 2003 Annual Report 13

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    Corporate Management Stockholder Reference Information Edward J. Zander Stock transfer, registrar, dividend Chairman of the Board and Chief Executive Offi cer disbursing, direct stock purchase and dividend reinvestment agent Mike S. Zafirovski Mellon Investor Services LLC President and Chief Operating Offi cer Overpeck Centre Robert L. Barnett 85 Challenger Road Executive Vice President Ridgefield Park, NJ 07660 U.S.A. 1 800 704 4098 Eugene A. Delaney www.melloninvestor.com Executive Vice President and President, Global Relations and Resources Organization For shareholder correspondence: David W. Devonshire Mellon Investor Services LLC Executive Vice President and Chief Financial Offi cer Shareholder Relations Department P.O. Box 3315 Glenn A. Gienko South Hackensack, NJ 07606-1912 U.S.A. Executive Vice President and Motorola Director, Human Resources For transfer of stock: A. Peter Lawson Mellon Investor Services LLC Executive Vice President, General Counsel and Secretary Stock Transfer Department P.O. Box 3312 Leif G. Soderberg South Hackensack, NJ 07606-1912 U.S.A. Senior Vice President and Director, Global Strategy and Corporate Development Investor Relations Steven J. Strobel Senior Vice President and Corporate Controller Security analysts, investment professionals and shareholders can find investor relations information Padmasree Warrior on the Internet at www.motorola.com/investor. Senior Vice President and Chief Technology Offi cer Inquiries should be directed to: Operating Management Investor Relations, Motorola, Inc. Corporate Offices Scott A. Anderson 1303 East Algonquin Road Executive Vice President, Schaumburg, IL 60196 U.S.A. President and CEO, Semiconductor Products Sector E-mail: investors@motorola.com Gregory Q. Brown 1 800 262 8509 Executive Vice President, President and CEO, Commercial, Government and Common Stock Industrial Solutions Sector Motorola common stock is listed on the New York, Dennis J. Carey Chicago and Tokyo Stock Exchanges. Executive Vice President, President and CEO, Integrated Electronic Systems Sector Annual Meeting of Stockholders Thomas J. Lynch Executive Vice President, The annual meeting will be held on May 3, 2004. President and CEO, Personal Communications Sector A notice of the meeting, together with a form of Proxy and a Proxy Statement, will be mailed to stockholders Daniel M. Moloney on or about March 15, 2004, at which time proxies Executive Vice President, will be solicited by the Board of Directors. President and CEO, Broadband Communications Sector Adrian R. Nemcek Availability of Proxy Statement and Form 10-K Executive Vice President, President and CEO, Global Telecom Solutions Sector The Proxy Statement and the Form 10-K are available on the Internet at www.motorola.com/investor. Business Risks A copy of the Proxy Statement and/or Form 10-K may be obtained without charge by contacting Statements that are not historical facts are forward-looking the Investor Relations Department as listed above. and involve risks and uncertainties. Motorola’s actual results could differ materially from those projected in the forward- Independent Auditors looking statements. For a list of factors that could cause, and in some cases have caused, such differences please KPMG LLP refer to the section entitled “Business Risks” in Motorola’s 303 East Wacker Drive 2003 Form 10-K. Chicago, IL 60601 U.S.A. Non-Incorporation of Form 10-K “Wrap” Motorola’s 2003 Form 10-K, as filed with the SEC, is included within this Annual Report. Other than the Form 10-K, all other portions of this Annual Report are not “filed” with the SEC and should not be deemed so. Motorola, Inc. 2003 Annual Report Printed on Recycled Paper. Design: Rick Valicenti / THIRST. Color Printing: Anderson Lithograph. 10-K Printing: RR Donnelley Financial.

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    we’re in your home we’re in your automobile we’re in your workplace we’re in your life we’re in your future motorola.com Motorola, Inc. Corporate Offi ces 1303 East Algonquin Road, Schaumburg, IL 60196 U.S.A. Tel +1 847 576 5000 MOTOROLA and the Stylized M logo are registered in the U.S. Patent and Trademark Office. All other product or service names are the property of their respective owners. The Bluetooth trademarks are owned by their proprietor and used by Motorola, Inc. under license. © Motorola, Inc. 2004. Motorola, Inc. 2003 Annual Report Motorola is an Equal Employment Opportunity/Affi rmative Action Employer.

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