Motorola Rises in Phoenix

In 1921, businessman Paul Galvin and his friend Edward Stewart started a storage battery factory in Marshfield, Wis.  The company failed to make a profit and went out of business two years later. In 1926, Galvin and Stewart restarted their battery manufacturing company, this time in Chicago. The company built a defective product and all of the units had to be recalled, so that company went out of business too.

Galvin’s third business venture started in Chicago in 1928 when, for $750, he purchased the tools and plans for a battery eliminator at the Stewart Battery Co. bankruptcy auction.  Paul and his brother Joseph incorporated Galvin Manufacturing Corp. on September 25, 1928.  At the time, radio receivers for home use were all the rage and the radio sets ran on very expensive, heavy and messy batteries. The Galvins wanted to solve that, so they went to work manufacturing “battery eliminators,” which were basically AC-to-DC power supplies that enabled consumers to plug battery-operated radios into their home’s AC electrical system. One of their first customers, Sears, Roebuck and Co., sold the battery eliminators to consumers through mail order catalogs.

In 1930, Galvin Manufacturing introduced the Motorola radio, one of the first commercially successful car radios. These one-way radio receivers were used by consumers, public safety departments and municipalities. By the 1940s, Galvin Manufacturing had evolved into America’s premier maker of radios for car and home use (see Figure 1). At the same time, the company’s expertise in two-way radio systems was growing.1

When World War II broke out, Galvin Manufacturing provided two-way radios for the military, including the 1940 U.S. Army Signal Corps’ “Handie-Talkie” SCR536 AM handheld two-way radio, and, in 1943, the “Walkie-Talkie” SCR300, the world’s first FM portable two-way radio  (see Figure 2). Galvin Manufacturing also prospered through government contracts for early airplane radar detection systems.

From Galvin Manufacturing Corp. to Motorola

Galvin Manufacturing Corp. went public in 1943 with the sale of 40,000 shares at $8.50 per share.  All the products the company sold, except military radios, carried the name “Motorola.”  This included automotive radios, home radios and two-way radios for public safety, fire and industrial use.

The name “Motorola” is a portmanteau of the words “Motor” for motorcar and “ola” for sound, as in Victrola. In the 1930s, “ola” was a common suffix widely used in the radio business.  There were many companies and brands that ended in ‘ola.TheMotorola brand was meant to imply “sound in motion.” The brand was so successful that in 1947, Galvin Manufacturing changed its name to Motorola and set up a profit-sharing plan for employees. The company also began making television sets in addition to radios for both car and home use.²

Galvin Hires a Visionary

It’s safe to say that Motorola would never have become as influential in the world of RF communications without hiring Dr. Daniel E. Noble (see Figure 3). Dr. Noble came to Galvin Manufacturing with a wealth of RF knowledge and was a true visionary. While teaching at Connecticut State College, he was the designer, builder, operator and manager of the Connecticut State College radio broadcasting station. He later branched out, making various radio relay stations, and eventually built one of the first commercial FM broadcast stations.

In 1940, Dr. Noble created the first two-way police radio system for the entire state of Connecticut, which became the first practical mobile two-way FM radio system in the world. This breakthrough achievement attracted the attention of Paul Galvin, who offered Noble the position of director of research at Motorola.³

Dr. Noble Takes Motorola to Phoenix

Dr. Noble set into motion what was to be the beginning of Motorola’s semiconductor work and would eventually lead to the establishment of the Semiconductor Products Sector (SPS) — the manufacturing arm for the semiconductor components consumed by other equipment and system manufacturing divisions of the company. After World War II, at the urging of the United States government, large corporations were encouraged to decentralize and move away from major metropolitan areas (in an attempt to reduce the potential for nuclear targets within concentrated areas). In 1949, Dr. Noble was tasked with setting up a solid-state electronics research laboratory for Motorola in Phoenix, Ariz. only two years after the first public announcement of the discovery of the transistor by Bell Labs.

Convincing Dr. Noble to move to Phoenix did not take a lot of arm twisting. He loved horseback riding and the thought of being within a few hours drive to the Grand Canyon. He also needed the drier air to help relieve his asthma. So Dr. Noble enthusiastically made the cross-country move, even though others in the company called the endeavor “Noble’s folly.”

Expanding into the nascent semiconductor business was a risky move for the company. There was the question if the company’s internal consumption would ever be large enough to achieve semiconductor manufacturing economies of scale, so the early decision was to sell the components to other equipment manufacturers, even if they were direct competitors.⁴

The original research lab was a rented building on Central Avenue, which was the temporary location until the headquarters building was constructed on 56th Street.  Eventually, the team expanded and outgrew the 56th Street location, so a manufacturing building was constructed at the 5005 East McDowell location that is now the home of ON Semiconductor.

In 1955, Dr. Bill Taylor succeeded in developing the world’s first commercially-available high power, germanium transistor for car radios, 2N176 (see Figure 4). This was the product that launched Motorola’s Semiconductor Products Sector (SPS) manufacturing in Phoenix.  Large scale 2N176 transistor production began in 1956, and by January 1957 over one million of these devices had been manufactured. This represented 50 percent of the power transistors made by all of the transistor manufacturing companies at that time. The initial cost for the 2N176 was $26, but Motorola’s economies of scale and manufacturing expertise lowered the cost to $2 by 1960. The enormous success of this and other transistor products established Motorola as a major semiconductor manufacturer, and production of the 2N176 lasted well into the 1960s, until cheaper silicon technology surpassed germanium. The 2N176 used the hermetic TO-3 package style pioneered by Motorola, which helped to establish the JEDEC TO packaging standards.⁵

The external sales of components on the open market allowed SPS to grow and become a very profitable division for the company. In later years, it would be the SPS division that became a “cash cow,” sometimes providing over half of the company’s revenue and fueling investment in R&D in the other equipment divisions.

Building Components to Fuel Growth

In  the 1960s, Motorola expanded its product lines with guided missile designs, space communications, radios for ships and aircraft, components and integrated circuits for TV sets, car ignitions and hundreds of other products. Most of NASA’s spacecraft communicated through Motorola transceivers, including Neil Armstrong’s famous words from the moon in 1969, “One small step for (a) man, one giant leap for mankind.”

All of these new equipment and systems needed semiconductors for growth and technology advancement.  Phoenix-based SPS was tasked with creating these components. In the 1960s, Motorola’s RF power products group succeeded in creating the world’s first solid-state VHF land mobile two-way radio with germanium RF power transistors. Many consider the Motorola Transistorized Advanced Communications (MOTRAC) radios to be the best transistorized two-way radio new product introduction campaigns in history, and the radios were wildly successful (see Figure 5). The MOTRAC family was seen on “Adam-12,” “Dragnet,” “Emergency” and many other police shows of the era. The group’s RF power transistors were also used in one of the first car telephone systems, the TLD-1100 “MJ.”

Motorola demonstrated the world’s first portable cellular phone and system in 1973. In the 1980s, after Bob Galvin showed one to President Ronald Reagan, the White House supported open competition for portable phones instead of an AT&T monopoly. In 1983, the FCC approved the world’s first commercial cell phone, the Motorola DynaTAC (see Figure 6). Motorola later dominated the cell phone hardware business for years. Until the introduction of the iPhone, the Motorola RAZR was the best-selling phone in the U.S. market, and to this day is the best-selling clamshell phone in the world. In just four years, Motorola’s RAZR sold over 130 million units.

In January 2011, Motorola split into two separate companies, each still using the Batwing logo and each using the word Motorola as part of their name. Motorola Solutions is the last remaining independent division of the original Motorola and is based in Schaumburg, Ill. The company concentrates on police technologies, radios and commercial needs. The spin-off, originally based in Libertyville, Ill. and later in Chicago, was named Motorola Mobility and produced cellular phones. Motorola Mobility’s core business revolved around the design of wireless handsets, and also licensed its intellectual property: cellular and wireless systems, integrated applications and Bluetooth accessories.6

In August 2011, Google announced that it would purchase Motorola Mobility for $12.5 billion; the deal was completed by May 2012. The acquisition was a strategic move envisioned to strengthen Google’s patent portfolio. At the time, Motorola had over 17,000 patents, with 7,500 additional patents pending, the most for cellular communication or handset operation. The expanded portfolio was used to defend the Android operating system, the subject of numerous patent infringement lawsuits between the various handset manufacturers. Google had tried to purchase the bankrupt remains of former cellular giant Nortel Networks Corp., for a similarly large patent portfolio, but it was rebuffed.

In October 2014, Google sold off the Motorola Mobility division to the Lenovo Group for $2.91 billion. Google maintains ownership of the vast majority of the Motorola Mobility patent portfolio but licensed Lenovo to use this rich portfolio of patents and other intellectual property. Additionally, the Lenovo Group received over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio. The Beijing-based company has over 33,000 employees and approximately $39 billion in annual sales. In2014, it became the largest vendor of smartphones in mainland China and sold over 10 million Motorola branded smartphones in Q4 of 2014.

Motorola Solutions produces public safety and commercial products, analog and digital two-way radios and accompanying software and networks, and voice and data communications products based on long-term evolution (LTE). In addition, the company provides a wide variety of services and smart public safety solutions that help first responders better predict and manage events using the wide variety of information now available from the public. The company has over 15,000 employees and approximately $5.9 billion in annual sales.

Six Sigma and Motorola’s Malcolm Baldrige Award

In the mid 1980s, President Ronald Reagan sought to strengthen the U.S. economy in the face of a world with increasing competition, especially coming from the Japanese. President Reagan, along with U.S. business leaders, felt that a renewed emphasis on world-class quality was necessary for U.S. businesses to thrive in a world with ever increasing quantities of high technology trade goods. So Congress passed and the President signed H.R. 812, the Malcolm Baldrige National Quality Improvement Act of 1987. The act established an awards program to provide special recognition for companies demonstrating high achievement in improving the quality of their goods or services.

Motorola did not require the Malcolm Baldrige National Improvement Act of 1987 to spur them towards superior quality. The company was already well on its way. In 1986, Motorola set a goal of “Six Sigma” quality for all of its manufacturing operations. Towards this goal, they established in-house training sessions and trained black-belt quality (and statistical) experts to assist in troubleshooting difficult manufacturing processes. Motorola was one of the inaugural winners of the Malcolm Baldrige National Quality Award in 1988 for its high ranking in quality products and for developing the Six Sigma manufacturing process. Motorola was also one of only six two-time winners when it won again in 2002. The Six Sigma quality process, statistical based manufacturing process, new employee training procedures and black-belt employee status still thrive at Motorola Solutions and in many of the various company spin-off organizations.

Building a Loyal Workforce

Motorola set the standard for establishing a “respect for the employee” culture, and the nickname of their company was “Mother Moto.” Once hired, an employee had a job until retirement, with regular promotions occurring every few years and a regular return on net assets (RONA) bonus at year’s end, based on the company’s profitability. The company had a very generous retiree health care plan, such that if one met “the rule of 75” (age plus years of employment), one could retire with very affordable health care coverage. There are thousands of people on this plan now and thousands of people expecting to enjoy the benefits of this plan in the future.

The company was on the cutting edge of building employee loyalty in a host of ways. Salaries were competitive yet never exceptionally high. It was the excellent benefits, the challenging work projects and the worker camaraderie that attracted people to the company. Groundbreaking offerings included Motorola University, a policy where employees were expected to enhance their skills by taking at least 40 hours of continuing education classes per year. It was not uncommon to have 10, 20 and even 30 year veterans working on the same team. Longevity and loyalty were strongly rewarded, and employees stuck around.

You’ve Been Galvinized!

There was a term for people who passed their 10 year anniversary with the company. After ten years, the expectation was that that employee could not be fired or laid off without a direct written order by CEO Bob Galvin. These 10 year veterans were “Galvinized” and therefore could take greater risks and go after new markets without the fear of failure and firing. It is a play on the word galvanized, a protective zinc coating used on steel. The zinc coating becomes the sacrificial anode and dissolves before the underlying steel is damaged.⁷

The Spin-offs

Little did Dr. Noble know what the long-term impact of moving Motorola’s semiconductor development arm on the employment footprint of Maricopa County would be. Because of his need for a drier climate and love of horseback riding, the Phoenix area is now a hot-bed of high tech development. Over the years, Motorola has created and spun off several successful companies that are still very much alive and successful in the Phoenix valley.  Here we highlight some of the more significant businesses that can trace their roots to humble Motorola beginnings.

The Iridium Satellite communication concept was conceived by Bary Bertiger, Dr. Ray Leopold and Ken Peterson in late 1987. The rumor at the time was that one of these Motorola engineers was vacationing in Rocky Point, Mexico, (south of Phoenix) and was disappointed with the lack of cell coverage. The cellular telephone industry was just beginning and tower coverage was very spotty in most places outside of the core cities.The thinking was why not build a communications network based on satellites rather than cell towers?

The technology was created and the patents issued in 1988, but the final system was not fully operational until 1998 – at which time cell tower coverage was much better and cell phone subscription rates much cheaper. Iridium handsets were priced around $3,000 at a time when most consumers would get a free cell phone just by signing a three-year contract. Talk time was $9 a minute, when cellular was offering unlimited talk, text and messaging for around $50 a month.

Motorola spent over $5 billion to create the system and it was sold in 1999 to Iridium Satellite for a token price of only $25 million, including the headquarters building in Tempe, Ariz. In its nine months of operation, there were only 50,000 subscribers and the company needed 200,000 to break even. At the time, this fiasco was named one of the biggest business disasters of the decade, and it was a significant contributor to the eventual downsizing of Motorola.

Iridium Satellite refocused its sales efforts on international companies and the U.S. military and today does a large business on machine-to-machine data transfers on remote equipment. Technically, its headquarters are in McLean, Va., but the commercial communications gateway and the engineering, marketing, and product development operations are in Tempe. The company has over 725,000 subscribers and approximately $430 million in annual sales.

The first Motorola Semiconductor Products Sector spin off was ON Semiconductor in 1999. Motorola wanted to divest itself of the highly cyclical semiconductor business, so it split SPS into two groups, based roughly on their product technologies. Motorola held on to the more profitable business units that were working with integrated circuits (IC), microprocessors, digital signal processors and high-end logic chips. ON Semiconductor got the discrete components such as diodes, transistors, Zeners and standard TTL logic. The new company was headquartered in Phoenix at the 5005 East McDowell and 52nd Street complex, a manufacturing site that had been developed by Motorola in the early 1950s. Many long-term Motorola employees who were told their jobs were being transferred to ON Semiconductor quit on the spot and handed in their badges. Motorola kept the highly profitable RF power products division, even though most of its products were three leaded, discrete FETs and transistors. This eventual Freescale RF business unit was transferred out of the 52nd Street location and into its present home at 2100 E. Elliot, in Tempe. ON Semiconductor has approximately $2.4 billion in annual sales.

Motorola had a large business unit called the Government Electronics Group, which was located on the corner of McDowell and Hayden in Scottsdale. It specialized in producing radio communications, radar, weapons and other advanced electronics systems for government agencies and the military. At one time, the division employed over 7,500. In August 2001, after a few years of highly cyclical variations in the volume of business, Motorola agreed to sell the unit to General Dynamics for $825 million. At the time, the division had 3,000 employees and $850 million in sales. General Dynamics still operates the business and is now one of the largest employers in the Phoenix area. General Dynamics does not break out their sales figures by individual business units, but the company employs over 95,000 people worldwide and has approximately $31 billion in annual sales.

Motorola announced to its employees on October 16, 2003, that it would spin-off the remaining semiconductor business with an IPO, creating a new company named Freescale Semiconductor.  Even more long-term Motorola employees quit on the spot and handed in their badges. Motorola paid a lot of money to a marketing firm to come up with the name, the flying tiles logo called the ”Momentum” mark and the corporate color pallet, which includes the standard orange and yellow colors seen today. The name Freescale is a spin on a mountain climbing term, free climbing, which means free from aid on the way up but with rope protection in place to prevent failure. The IPO was completed on July 16, 2004.

Freescale designs and produces embedded hardware and software for the automotive, networking, industrial and consumer markets. Its product portfolio includes microprocessors, microcontrollers, analog, sensors and RF power products. The company also offers software development tools to support product design and development. Freescale’s current patent portfolio includes approximately 6,100 patent families. The headquarters are in Austin, Texas with design, research and development, manufacturing and sales operations in more than 75 locations in 19 countries. The company employs over 17,000 people worldwide and has approximately $4.6 billion in annual sales. Freescale’s RF, analog and sensors businesses are still based in Tempe.

Motorola has always had a very strong emphasis on radio communication and the business units here in the “valley of the sun” have always been a strong contributor in RF power transistors. The original Motorola RF power products group was the first to make the high power RF transistors that enabled the first solid-state land mobile radios.

The TRW Acquisition and Early Cellular Business

In the late 1980s, there were only about five serious RF power transistor vendors; Motorola, TRW, M/A-COM PHI, Philips (now NXP) and Acrian. Motorola had about a 35 percent market share, TRW about 15 percent and MSC about 10 percent of the overall RF power transistor market. Motorola bought the TRW RF division in 1988. A recession drove several competitors out of the business, leaving Motorola with a 60 percent market share in the early 1990s. Motorola purchased TRW to gain market share, acquire talented RF engineers and access the higher frequency microwave business. Back then, Motorola dominated the market below 500 MHz in the land mobile market and TRW dominated above 1 GHz. There were these new things called GSM cellular telephones that were taking off in Europe at 960 MHz. That initial leverage in the cellular infrastructure business was the key start for the eventual Freescale RF success. In the early 1990s, about 40 percent of the RF division’s personnel were ex-TRW employees.⁸

Conversion from Bipolar to LDMOS FETs, 1993-1999

One of the key developments in enabling significant cost reduction in cellular infrastructure equipment was the development of the LDMOS FET between 1991 and 1993. The first AMPS and NAMPS base stations used Class C, common base bipolar transistors in a single channel, one amplifier per carrier design with a cavity combiner and dual stage output isolators to prevent reverse injected intermodulation distortion. They were horribly inefficient and had one amplifier per carrier, which limited capacity. AT&T developed the single stage feedforward base station with Class AB, common emitter TRW bipolar devices. However AT&T struggled with linearity as the back off IMD hump of the Class AB parts was only about -35 dBc. Motorola solved this dilemma by creating the dual stage feedforward design, but losses in the output delay lines (typically 10 meters of coax looped on the back of the frame) made the overall AC to RF conversion efficiencies 10 to 20 percent. LDMOS FETs solved this issue by having back-off IMD humps in the -45 dBc range, enabling the single loop feedforward system to meet the linearity specs. An additional benefit is that the off-state impedance of the LDMOS FETs is relatively high compared to that of the bipolar devices, enabling Doherty circuit configurations. In just a few short years, virtually all of base station power amplifiers were converted from bipolar to LDMOS. Figure 7 shows the block diagram for the feedforward design and typical performance. It shows the typical LDMOS Class AB back-off IMD humps for various bias conditions. This part shows a -55 dB hump at 8 W Pout and 550 mA bias.

For the past 25 years and running, Motorola, and now the Freescale RF business unit, has enjoyed the number one market share position in high power RF transistors for cellular infrastructure. The business unit employs roughly 300 people at the Tempe operations site. Sales grew 57 percent in 2014 to approximately $550 million.

Conclusion

Motorola has a long and glorious history of influence on many businesses in the Phoenix area. At its zenith in 1998, Motorola employed 150,000 people worldwide and over 20,000 in Arizona. In 2000, its annual sales peaked at approximately $38 billion, and it was the largest private employer in Arizona. Many businesses that still remain in Arizona and elsewhere owe their existence to Motorola and the strong business culture. The total 2014 sales of all the spin-offs (and the whole of General Dynamics) total over $39 billion (not adjusted for inflation), slightly larger than when they were all grouped together under the Motorola corporate umbrella. Working at Motorola was not a cult, but there were certain traditions, rules and requirements that made it a very unique place to work.

Welcome to the 2015 IEEE, MTT-S International Microwave Symposium show in Phoenix!

Leonard Pelletier is a senior member of the Technical Staff and an application support manager for Freescale RF in Tempe, Ariz. and he is in charge of providing technical assistance to the amplifier design community. He is a senior member of technical staff and the marketing representative for the internal Change Action board. He is an ex-TRW employee and has been with the company since 1987 and working in his current position since 1995.  Prior to his work with RF components, Pelletier held amplifier design engineering positions with the Motorola Cellular Infrastructure Group in Arlington Heights, Ill. and the Motorola RF Products Division in Torrance, Calif., all positions involving cellular infrastructure active device communications products. Pelletier has been with the same company for 28 years, where he’s been part of three company name changes, three state relocations, plus five city changes and numerous building and office location changes. Pelletier received a BSEE from Cal Poly, Pomona, Calif. in 1983 and an MBA from Pepperdine University, Malibu, Calif. in 1988. He is also a state registered professional engineer in the State of California and has been working in the high power RF arena since 1983.

1. Petrakis, Harry Mark, “The Founder’s Touch, The Life of Paul Galvin of Motorola,” Motorola University Press, Third Edition, 1991, ISBN 0-89434-119-7 pp. 46–61.
2. Motorola Solutions website, historical timeline. www.motorolasolutions.com/US-EN/About/Company+Overview/History/Timeline, 2-24-2015.
3. Motorola Solutions website, history, Dan Noble biography, www.motorolasolutions.com/web/Business/Corporate/About/History/Explore_Motorola_Heritage/_StaticFIles/Motorola_Dan_Noble_bio.pdf, 2-24-2015.
4. Petrakis, Harry Mark, “The Founder’s Touch, The Life of Paul Galvin of Motorola,” Motorola University Press, Third Edition, 1991, ISBN 0-89434-119-7 pp. 215–220.
5. Transistor Museum website, photo gallery, Motorola 2N176, Jack Ward. http://semiconductormuseum.com/PhotoGallery/PhotoGallery_Motorola_2N176.htm, 2-24-2015 (Copyright © 2007 by Jack Ward. All Rights Reserved. www.transistormuseum.com)
6. Contributed by Sue Topp, Drew Davis (archivist) and Tama McWhinney, Corporate Communications, Motorola Solutions.
7. Personal interview on 1-15-2015, with Bob Davidson, 42 years as a Motorola/Freescale RF Designer.
8. Personal interview on 2-12-2015 with Bob Keasler, retired, 46 years as a TRW/Motorola/Freescale Manager.
9. Motorola Solutions website, historical timeline www.motorolasolutions.com/US-EN/About/Company+Overview/History/Timeline, 2-24-2015.

ANOTHER CHAPTER BEGINS

Editor’s Note: On the eve of this year’s Mobile World Congress, NXP announced that it will acquire Freescale Semiconductor, paying $11.8 billion in stock and cash for Freescale’s $4.6 billion in 2014 revenue. Rick Clemmer, NXP’s CEO and president, will remain CEO and president of the combined entity. NXP made no announcement of any role for Gregg Lowe, Freescale’s CEO and president.

Freescale and NXP are the #1 and #2 players in the LDMOS RF power transistor market; combined, they would dwarf #3 Infineon. To avoid likely regulatory issues, Clemmer told investment analysts that NXP will retain Freescale’s RF segment and sell their own high performance RF (HPRF) business before the Freescale acquisition closes.

Although the Freescale brand and corporate entity seem likely to disappear, the DNA of Motorola’s Semiconductor Products Sector will live on at NXP.