Exclusive: Motorola looking to exit wireless LAN business - sources

Sat Oct 19, 2013 9:53am EDT
 
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By Nadia Damouni, Soyoung Kim and Nicola Leske

NEW YORK (Reuters) - Motorola Solutions Inc is exploring the sale of its underperforming wireless LAN business, which has grappled with declining share in a market dominated by rivals such as Cisco Systems Inc, people familiar with the matter said.

An exit from the wireless LAN market would come as Motorola, the provider of data communications and telecommunications equipment, seeks to focus on its core government and public safety division.

Motorola Solutions, which succeeded Motorola Inc following the spin-off of the mobile phones business into Motorola Mobility in 2011, provides communication services for the U.S. government and other enterprise customers. Motorola Mobility was later sold to Google Inc for $12.5 billion.

The wireless local area network unit, which is under Motorola Solutions' enterprise division, has struggled amid competition from top players including Aruba Networks Inc and Hewlett-Packard Co, as well as smaller players such as Ubiquiti Networks Inc.

"It's a tough market. It's being squeezed from the top by Cisco and from the bottom by Ubiquiti," said one of the people familiar with the matter, adding that the talks are at an early stage.

The people asked not to be named because the matter is confidential. Motorola declined to comment.

The Motorola unit's revenues declined by a mid-single digit percentage point in the second quarter, following a massive 30 percent decline in the first quarter. The business had $216.7 million in 2012 revenues, roughly 8 percent of the $2.71 billion enterprise business.

The global enterprise wireless LAN business is expected to be a $4 billion market for 2013, according to research firm Dell'Oro group. Cisco is the market leader, with nearly 55 percent of the market segment revenue, followed by Aruba at just over 12 percent.   Continued...

 
Greg Brown, Chairman and CEO, Motorola Solutions, speaks with the media after meeting with U.S. President Barack Obama and other CEOs at the White House in Washington February 5, 2013. REUTERS/Joshua Roberts