Gartner: Motorola to Get World-Class Software Platform With TTPCom Buy

Christian Heidarson and Alan Brown at Gartner assess Motorola's (MOT) acquisition of TTP Communications, a provider of wireless software platforms and semiconductor intellectual property (IP). They write:

Through this offer, Motorola seeks ownership of TTPCom’s Ajar application development framework. Motorola has licensed Ajar since late 2005 and clearly believes its strategic benefits are strong enough to justify making an offer for the company. Ajar is a good fit with Motorola’s original design manufacturer (ODM) strategy. By making application development independent of the underlying hardware configuration, Ajar enables Motorola to source phones from multiple ODMs while providing a common application framework across all its phones.

Heidarson and Brown point out that "TTPCom is also a leader in the semiconductor IP industry, where its extensive portfolio of high-quality, licensable wireless IP has been instrumental in helping Intel and Analog Devices enter the baseband market." They think "Motorola could enable new entrants into the baseband semiconductor market, and even establish a foothold in emerging convergence markets, such as cameras with integrated third-generation modems for uploading photos on-the-go."

Heidarson and Brown note Motorola has traditionally used Freescale and Qualcomm (QCOM), among other vendors, for its in-house handset designs and believes that, "by enhancing Motorola's ODM strategy, the acquisition would put pressure on Motorola's existing baseband vendors."

They think that "together, TTPCom's software and silicon IP licensing businesses will provide Motorola with a wide range of strategic options that could create a more intense competitive environment among all its suppliers — while allowing Motorola to maintain control over quality." Heidarson and Brown recommend:

• Semiconductor vendors supplying Motorola: Prepare for more intense competition for Motorola’s handset business.
• TTPCom customers: Seek assurances from Motorola that you will receive the expected support and maintenance once the deal has been completed.