Motorola Solutions Inc. plans to spend more on developing body cameras and other video-security tools as it seeks to bulk up its presence in the sector.
The Chicago-based company, created in 2011 when mobile-phone maker Motorola Inc. split into two businesses, started manufacturing and selling the cameras in 2019. That year, it bolstered its profile in the segment when it acquired WatchGuard Inc. and Edesix Ltd., which made body cameras for law enforcement in the U.S. and Europe, respectively.
Chief Financial Officer Jason Winkler is playing a key role in the effort to build the video-security business, including allocating more capital toward research and development.
“We’ve chosen to dial up investments to support the growth that we expect,” said Mr. Winkler, who joined Motorola in 2001 and became CFO last July.
Video security and analytics is Motorola Solutions’s fastest-growing business. Revenues increased to $927 million in 2020, up 30.7% compared with the prior year. The company expects video-security sales to jump again this year, this time by more than 20%, amid strong orders from governments and businesses like construction and property companies.
Still, two-way radios remain Motorola Solutions’ dominant category, representing about 81% of the $7.4 billion in revenue the company raked in last year.
Expenses for research and development totaled $686 million in 2020, down 0.1% from the previous year. This year, however, the company plans to spend about $746 million on R&D, a spokeswoman said, of which nearly half will go to the video-security and software businesses.
Motorola Solutions, which has its own factories but also sources from external suppliers, is up against competition from Axon Enterprise Inc., the company behind Taser. Based in Scottsdale, Ariz., Axon dominates the U.S. market for body-worn cameras.
Jason Winkler, chief financial officer at Motorola Solutions.
Photo: Motorola Solutions
Still, Motorola Solutions is acquiring new customers in the U.S. and elsewhere. It recently won new contracts with the Metropolitan Nashville Police Department and the Illinois State Police.
Last month, the company said France’s Ministry of the Interior will deploy 30,000 of its body cameras to national and military police officers.
For now, the sector is tightly contested.
“The body-worn camera market … remains highly competitive as the barriers to entry are low and new competitors are entering the market everyday,” rival Axon said in a statement this week.
The market for body cameras is tough, but Motorola Solutions could bundle its products with in-car cameras or two-way radios to gain ground, said Matthew Jones, a senior credit officer at Moody’s Investors Service.
“It’s not a slam-dunk business, per se,” he said. “They have to play a slightly different game when they’re not the leader by a big margin.”
Write to Mark Maurer at [email protected]
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Appeared in the June 4, 2021, print edition as ‘Motorola Solutions To Invest in Cameras.’
