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Freescale undergoes "identity" makeover

Posted: 28 Jun 2011 ?? ?Print Version ?Bookmark and Share

Keywords:embedded processing? sensor technology? analog?

If you are to describe Freescale Semiconductor Inc. in one word, the non-magic word too often linked to it has been "debt." A $7.6 billion millstone hangs around the company's neck, incurred when Freescale agreed to a $17.6 billion leveraged buyout by private equity firms in 2006.

What has taken place at Freescale, especially since Rich Beyer took over its helm in 2008, was a regime of painful restructuring and cold-blooded decisions in which winners and losers were chosen within its sprawling product portfolio.

After getting the house in order and taking Freescale to an IPO last month, Beyer and his executive team now face a new challenge: creating a dynamic identity for the company, with a clarified message on who Freescale is. They're looking for a new magic word.

The scale and breadth of demos, training and presentations Freescale brought to its Freescale Technology Forum (FTF) were precisely designed to convince its constituency!partners, customers, financial and industry analysts, media and its own employees!that Freescale has more than enough cash-generating power. "This is not your grandfather's Freescale," as Henri Richard, Freescale's chief sales and marketing officer, put it.

This event might have done the trick!to an extent.

A two-hour opening keynote session featured some really high-volume audio and a dizzying onslaught of quick-cut video, prompting Joe Bryne, senior analyst at Linley Group, to remark, "It was glitzier than IDF [the Intel Developers Forum], don't you think?"

Indeed. The event, attended by 2,000 people, made some in the audience even forget!momentarily!the long-term debt obligations faced by Freescale. The company used much of its IPO proceeds ($783 million) to pay down the arrears, but only made a dent in the balance.

Freescale's executive team put on a full-court press to burnish its image, stressing the company's accomplishments in recent quarters and its strategy to grow in the future.

Rich Beyer

CEO Rich Beyer gives his keynote at Freescale Technology Forum

Beyer, in his keynote, portrayed Freescale as a company of "embedded processing."

He is pitching an embedded processor placed in the center!surrounded by a number of sensors, RF, analog components and software that create a system.

This doesn't make for a snappy one-word description. Nonetheless, Beyer made it clear that Freescale is zeroing in on "embedded processing," which Freescale believes is driving the proliferation of smart devices C estimated to grow to 10 billion units in 2015.

"Thanks to embedded processing, we have cut the cord to a desktop. We are creating devices that are always on, always connected and always with us; and they are the devices that conform to us, not the ones we need to conform to," Beyer said

Freescale's plan is to ride the wave of "connected intelligence." It wants to help build infrastructure that supports the explosion of IP traffic, new devices and new applications; develop processing engines for smart mobile devices (smart phones, tablets and automotive); promote mobility and connectivity in tele-health; and create distributed intelligence in smart energy.

That vision alone, however, is hardly original. Almost every chip company!Intel and Texas Instruments (TI) included!is spouting "embedded processing" as its mantra.

Freescale still remains a company with wide-ranging products. In the fiscal year ending December 31st, 2010, each of Freescale's three key business divisions!microcontroller solutions, networking/multimedia, RF/analog/sensors!brought in 36 percent, 28 percent and 24 percent, respectively, of the company's total revenue of $4.46 billion. Each business division is in a high-growth market. Every group increased net sales by double digits over the previous year: microcontrollers by 43 percent, networking/multimedia by 33 percent and RF/analog/sensors by 30 percent.

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