Is Motorola Solutions Pooling Its Resources Into R&D Effectively?

-4.11%
Downside
355
Market
340
Trefis
MSI: Motorola Solutions logo
MSI
Motorola Solutions

Motorola Solutions’ investments in research and development (R&D) are aimed at developing new products, systems and processes to trigger future growth and help stay on par with or better than the competition. In addition, part of that investment goes towards developing effective public safety network installation and deployment techniques so as to minimize the cost of sales and maximize gross profits. Considering this, the efficiency of Motorola’s R&D can be gauged by gross profit dollars (since it incorporates cost of sales) generated per dollar spent on R&D.

MSI R&D Chart

The chart above indicates that the company’s R&D efficiency has increased over the past few years as investments in R&D reaped benefits. However, we expect Motorola’s R&D efficiency to experience some pressure going forward as the company plans to invest a significant portion of the $2 billion Silver Lake investment into product innovation and technological advancements. And the positive impact of these investments on Motorola’s revenues and gross profits is unlikely to be immediate.

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MSI R&D table

 

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Motorola Solutions
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