by Carl Delfeld, Investment U Senior Analyst
Wednesday, October 26, 2011: Issue #1629
With the passing of Steve Jobs, the media attention is a bit overwhelming, yet richly deserved. The fanfare surrounding this week’s release of Walter Isaacson’s biography of Jobs rivals the launch of the iPad itself.
However, there was very little said about another visionary who passed away only a week after Steve Jobs.
In many ways, he was an old school version of Jobs and his contributions to how we communicate with each other were even more significant. That man was Robert Galvin, who passed away October 11 in Chicago, Illinois. He was 89.
Robert Galvin headed Motorola for more than three decades before retiring in 1990.
Like Jobs, Galvin was a college dropout. But the contrasts between them are striking.
While the vegan Steve Jobs represented new-age California, Galvin, a meat and potatoes man all the way, was American heartland to the core. Born in Wisconsin in 1922, Galvin would eventually settle in Illinois.
Galvin served in the Signal Corps during World War II. It might be hard to imagine Jobs in the military given his constant questioning of authority.
Galvin started in the stockroom, Jobs early on launched his start up.
Jobs was a brilliant innovator, Galvin was an inventor and industrialist.
Galvin enjoyed tennis, alpine skiing, water skiing and wind surfing in his spare time, while Jobs seemed to have been completely focused on Apple. Apple was anything but a family business and Jobs’ family life was a bit of a mystery, while Galvin took over for his father, Paul Galvin, the founder of Motorola (formerly Galvin Manufacturing Corporation), in 1986. He would later turn the reins over to his son, Christopher. Under his leadership, Motorola sales grew from $216.6 million in 1958 to $6.7 billion in 1987, long before Apple became the darling of the high-tech world.
I was fortunate enough to meet Mr. Galvin in Tokyo in the 1980s during one of his countless Asian business trips (he was way ahead of his time in recognizing the growing markets in Asia). Motorola and Galvin’s accomplishments deserve much more recognition. Let me offer just a few to think about:
- During his time, the company invented the first mobile phone and the first mobile network.
- The company developed wireless pagers, hearing aids and the first 8-track player.
- Motorola created cutting-edge communication equipment for police and U.S. armed forces.
- It also supported NASA, and the 1969 moon landing introduced the first cordless portable TV in 1960 and led quality management breakthroughs such as the Six Sigma Program.
This legacy led to many more breakthroughs after Robert Galvin retired – namely smart cellphones.
Apple vs. Google – The Acquisition Game
With a touch of irony, just a few months before the passing of Steve Jobs and Robert Galvin, Motorola swung over to the camp of Apple’s chief rival – Google.
As Apple introduced the series of products that dazzled consumers and investors alike, competitors were looking for any edge they could find. Investors who are able to figure out chief rival Google’s next strategic step can profit in a big way.
On August 15, Google bought smartphone maker Motorola Mobility for $12.5 billion – a hefty 63-percent premium to its share price. This is a major boost for Google in smartphones, as Android mobile phones currently have a 48-percent share of the global smartphone market. Motorola Mobility also has 24,500 patents and pending patents – the legacy of Robert Galvin.
Apple’s new iOS 5 is now going head to head with the new Android 4.0 Ice Crème Sandwich. You have to love it.
This Motorola-Google deal underscores that the companies are largely battling through acquisitions in search and advertising technology, as well as music and mapping software.
Who will win? I think that both will thrive, but my bet is that Google will gain the upper hand due to its $25-billion cash equivalent war chest – double that of Apple’s $12 billion.
Article by Investment U