Motorola Solutions (NYSE:MSI) Software and Services business continues to gain traction, with revenues rising 15% to $758 million in Q1 2021. In comparison, Product sales grew just about 2% to $1.02 billion.
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The growth in the Software and Services business was driven by stronger sales of land mobile radio services, video security, and command center software.
The increasing mix of software and services revenue bodes well for Motorola Solutions on two counts. Firstly, the software segment has higher margins compared to products (37% vs. 13% adjusted operating margins in Q1). Secondly, the increasing focus on software and platforms should increase switching costs for Motorola’s products, potentially improving recurring revenues.
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