What Will Moto Buy Next?

Another week, another multi-million dollar Motorola Inc. (NYSE: MOT) acquisition. While it's not directly related to wireless, Motorola spent $208 million this week on Netopia Inc. in a move to improve its DSL capabilities.

The next company Motorola picks up could very well be wireless, however. The networking giant has recently shelled out several billion dollars for wireless companies including Good Technology Inc. , municipal mesh provider Mesh Networks, and Symbol Technologies Inc. (NYSE: SBL).

So what wireless company might be next on the Schaumburg, Ill.-based tech giant's list?

It's impossible at this point to predict exactly which company Motorola will purchase, but it's clear that the networking vendor, which already plays in the carrier, consumer, and corporate markets, has plenty of options.

Devices
The world's No. 2 maker of mobile phones, Motorola would have to think big to an acquisition in the device space worthwhile, according to Todd Kort at Gartner Inc. : "The only device vendors I’d be interested in if I were CEO of Motorola would be Research In Motion Ltd. (RIM) (Nasdaq: RIMM; Toronto: RIM) and High Tech Computer Corp. (HTC) (Taiwan: 2498)." RIM’s market cap, Kort points out, is now over $24 billion, so "they are probably too big for Motorola to swallow."

HTC is widely seen as the world's premier OEM of Windows Mobile devices. (See HTC Steps Out of the Shadows.) "HTC would be a very interesting acquisition for Motola, but I don’t think there is much chance of this," says Kort.

Jack Gold, analyst at J.Gold Associates comes up with a name that has been the subject of widespread buyout rumors recently. "They could go for a handset maker -- like Palm Inc. -- to broaden their offerings, especially in the enterprise space," says Gold. "But I think that is a stretch."

Meanwhile, Rob Enderle at the Enderle Group has his eyes on more consumer-focused gadgets: "You’d think they would buy a GPS firm like TomTom next, a device company like Sonos or Digital Deck, or even TiVo Inc. (Nasdaq: TIVO)"

Security
Adding more mobile security capabilities would probably make sense in terms of Motorola's more recent enterprise acquisitions -- i.e., Good and Symbol. This could mean buying one or more small companies, however, since no one company covers the entire spectrum of network and device wireless security.

"Security is clearly important, but more than just the network side of things," remarks Gold. "They also need some security component for their handsets."

Other Options
Gold could also see more areas opening up where Motorola will need to become a player. "VOIP is important so maybe a smallish company specializing in VOIP client side stuff and server stuff," he tells Unstrung. "Finally, I’d watch the device management space as they may want to find a company to help them there -- especially with the over-the-air stuff."

The Good Technology acquisition came about a year after Nokia Corp. (NYSE: NOK), the No. 1 handset manufacturer, bought Intellisync, like Good a provider of mobile email platforms. Indeed, countering Nokia's moves may be at the heart of Motorola's acquisition strategy. "I think Motorola has set its sights on Nokia as the company to beat," says Gold, "so it will move to counter whatever it sees Nokia doing, while at the same time having to look over its shoulder at Cisco Systems Inc. (Nasdaq: CSCO) to make sure Cisco does not start nipping at its markets."

Motorola itself is keeping quiet on its future strategy. "We don't provide comment on what kind of acquisitions we have on the horizon," a company spokeswoman says. Nonetheless, the firm has deep pockets should it decide to buy again. Motorola had net cash of $10.5 billion on its balance sheet at the end of the third quarter.

— Dan Jones, Site Editor, Unstrung