Motorola Solutions CEO Greg Brown Discusses Product Innovations and Market Strategy at JPMorgan Global Technology Conference

Key Takeaways

TL;DR: Motorola Solutions (MSI) emphasizes AI-driven product innovation (SVX/Assist, APX NEXT apps) and recurring software growth (targeting $400–500/device LT) while navigating tariffs ($100M FY25 headwind offset). Int'l expansion in body cams and NATO defense spend tailwinds support LT fundamentals. FY25 guidance held at $11.4B rev. (+5.5%), w/ software/services approaching 40% of mix.

1. New Product Highlights

• SVX & Assist:
  • Converged device integrating speaker mic, radio, and body cam, leveraging P25 secure audio + AI for noise cancellation/situational awareness. Launching July 2025.
  • Targets cost consolidation (lower TCO) and evidence capture (audio/video/dispatch).
  • Early interest from competitors’ customers (multi-year contracts expiring).
• Drone Investments:
  • BRINC (drone-as-first-responder): Delivery (medical supplies) + surveillance.
  • SkySaFe (counter-drone tech): Addresses rising security demand.

2. Macro & Tariff Impact

• Demand Resilience:
  • Public safety (70% of rev.) stable across cycles; enterprise (30%) steady, focused on critical verticals (healthcare, education).
  • No slowdown in int’l markets (30% of revs; NATO defense spending up to 3% GDP).
• Tariffs:
  • $100M net headwind in FY25 (China-sourced components) offset via inventory prep + cost controls.
  • USMCA-compliant manufacturing (Mexico/Malaysia/Canada) minimizes exposure.

3. Software & Recurring Revenue Drivers

• Command Center:
  • $800–900M biz (+12%); 3,500/6,000 U.S. PSAPs use MSI software (e.g., 911 call handling).
  • AI Assist: Translation (e.g., Spanish→English), transcription, and reporting tools to shorten emergency response times.
• APX NEXT:
  • 200K devices deployed (90%+ app attach rate); $300/year recurring rev. per device.
  • Growth lever: Apps (location tracking, OTA updates) aim to raise to $400–500/device w/ AI features.

4. Video & Body Cam Expansion

• Body Cameras:
  • Gaining share int’l (France, Sweden, Scotland) and enterprise vs. incumbents.
  • SVX integration differentiates via unified evidence (P25 secure audio + video).
• Video Segment:
  • Growing at 10–12%; $2B+ annual rev.

5. Financials & Guidance

• FY25 Outlook:
  • Rev.: $11.4B (+5.5%); Software/services nearing 40% of mix.
  • Margins held via operational discipline (no workforce cuts).
• Segment Growth:
  • Command Center: +12%.
  • Video: +10–12%.
  • LMR: Low-to-mid SD.