SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1997

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to______________

COMMISSION FILE NUMBER 1-7221

MOTOROLA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 36-1115800
(State of Incorporation) (I.R.S. Employer Identification No.)

1303 East Algonquin Road, Schaumburg, Illinois 60196
(Address of principal executive offices)

Registrant's telephone number (847) 576-5000

Securities registered pursuant to Section 12(b) of the Act:

Name of Each Exchange on
Title of Each Class Which Registered
------------------- ------------------------

Common Stock, $3 Par Value per Share New York Stock Exchange
Chicago Stock Exchange
Liquid Yield Option Notes due 2009 New York Stock Exchange
Liquid Yield Option Notes due 2013 New York Stock Exchange
Rights to Purchase Junior Participating New York Stock Exchange
Preferred Stock, Series A Chicago Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

The aggregate market value of voting and non-voting common equity held by
non-affiliates of the registrant as of January 31, 1998 was approximately $34.4
billion (based on closing sale price of $59.5625 per share as reported for the
New York Stock Exchange-Composite Transactions).

The number of shares of the registrant's Common Stock, $3 par value per
share, outstanding as of January 31, 1998 was 597,503,874.

DOCUMENTS INCORPORATED BY REFERENCE

Document Location in Form 10-K
-------- -----------------------

Portions of Registrant's Proxy Statement for 1998 Annual Meeting of Stockholders Parts I, II, III and IV
Including Management's Discussion and Analysis and Consolidated Financial Statements

PART I
Item 1: Business

(a) General development of business.

Motorola, Inc. is a corporation organized under the laws of the State of
Delaware as the successor to an Illinois corporation organized in 1928.
Motorola's principal executive offices are located at 1303 East Algonquin Road,
Schaumburg, Illinois 60196 (telephone number: 847-576-5000).

Motorola is one of the world's leading providers of wireless communications,
semiconductors and advanced electronic systems, components and services. Major
equipment businesses include cellular telephone, two-way radio, paging and data
communications, personal communications, automotive, defense and space
electronics and computers. Motorola semiconductors power communication devices,
computers and millions of other products.

The term "Motorola" as used hereinafter means Motorola, Inc. or Motorola, Inc.
and its subsidiaries, as the context requires. "Motorola" is a registered
trademark of Motorola, Inc.

(b) Financial information about industry segments.

The response to this section of Item 1 incorporates by reference Note 8,
"Information by Industry Segment and Geographic Region," of the Notes to the
Consolidated Financial Statements contained in the attachment to Motorola's
Proxy Statement for the 1998 annual meeting of stockholders.

Cellular Products

The Cellular Subscriber Sector ("CSS") primarily designs, manufactures,
distributes, markets and services subscriber radio-telephone equipment for
cellular and personal communications networks. In addition, CSS resells
cellular line service in the U.S., Germany, France, Belgium, and the U.K.
markets. CSS's products include mobile, personal and wearable cellular
telephones and related accessories. Products are marketed worldwide through
carriers, distributors, dealers, retailers, and, in certain markets, through a
direct sales force. Products are also distributed through licensees in China
and Latin America.

The Cellular Infrastructure Group ("CIG") (part of the Cellular Networks and
Space Sector) primarily designs, manufactures, distributes, installs, markets
and services cellular infrastructure equipment. CIG's products include
electronic exchanges (i.e., telephone switches), base site controllers and radio
base stations for Code Division Multiple Access ("CDMA"), Personal Communication
Systems ("PCS"), Personal Digital Cellular ("PDC"), Global System for Mobile
Communications ("GSM") and analog technologies. Products are marketed worldwide
through a direct sales force.

The segment also is a joint venture partner in cellular operating systems in a
number of international jurisdictions and is an investor in IRIDIUM(R) gateway
companies.

Radio frequencies are required to provide cellular services. The allocation
of frequencies is regulated in the United States and other countries throughout
the world and limited spectrum space is allocated to cellular services. The
growth of the cellular and personal communications industry may be affected if
adequate frequencies are not allocated or, alternatively, if new technologies
are not developed to better utilize the frequencies currently allocated for such
use. Such occurrences might have an effect on the segment's results.

The segment has a few customers that, collectively, the loss of, or a
significant reduction in purchases by, could have a material adverse effect on
the results of the segment.

CSS carries reasonable product inventories in distribution centers to meet
customer delivery requirements. As a general rule, CSS does not permit
customers to return merchandise and does not grant extended payment terms,
although exceptions may be made if necessary to meet unique market conditions.
In CIG, payment terms are particular to individual contracts, a majority of
which provide for the hold back of certain residual payments until system
acceptance by the customer. CIG permits customer returns in accordance with
specific contract terms. For qualifying customers, CIG finances equipment
purchases under various arrangements.

Participation in a very competitive industry, with constant changes in
technology, requires continuing and extensive investment in research and
development programs. Management believes, looking forward, that Motorola's
commitment to research and development programs to improve existing products and
services and to develop new products and services, together with its utilization
of state-of-the-art technology, should allow the segment to remain competitive.

The segment experiences intense competition in world-wide markets from
numerous competitors ranging in size from some of the world's largest companies
to small, specialized firms. Competitive factors in the market for the
segment's products are price, service, delivery, quality, availability,
warranty, product features, company image, time-to-market and product and system
performance.

The segment's backlog amounted to $2.19 billion at December 31, 1997 and $1.94
billion at December 31, 1996. The 1997 order backlog is believed to be
generally firm and 100% of that amount is expected to be shipped in 1998. The
forward-looking estimates of the firmness of such orders is subject to future
events which may cause the percentage of the 1997 backlog actually shipped to
change.

Materials used in the segment's operations are generally second-sourced to
ensure a continuity of supply. Occasional shortages in purchased components do
occur. Energy necessary for the segment's manufacturing facilities consists of
electricity, natural gas and gasoline, all of which are currently in generally
adequate supply. The segment's facilities are highly automated and, therefore,
require a reliable source of electrical power. Labor is generally available in
reasonable proximity to the segment's manufacturing facilities. Difficulties in
obtaining any of the aforementioned items could affect the segment's results.

Patent protection is extremely important to the segment's operations. The
segment has an extensive portfolio of patents relating to its products, systems,
technologies and manufacturing processes. Reference is made to the material
under the heading "General" for information relating to patents and trademarks
and the seasonality of business with respect to this segment.

CSS's headquarters are located in Libertyville, Illinois. CSS operates
manufacturing facilities in Libertyville and Harvard, Illinois; Easter Inch,
Scotland; Flensburg, Germany; Tianjin, China; and Campinas, Brazil. CSS also
has manufacturing licensees in China and Latin America.

CIG's headquarters are located in Arlington Heights, Illinois. CIG operates
manufacturing facilities in Arlington Heights and McHenry, Illinois; Fort Worth,
Texas; Jaguariuna, Brazil; Hangzhou, China; and Swindon, England.

Semiconductor Products

Semiconductors control and amplify electrical signals and are used in a broad
range of electronic products, including consumer electronic products, computers,
communications equipment, solid-state ignition systems and other automotive
electronic products, major home appliances, industrial controls, robotics,
aircraft, space vehicles, calculators and automatic controls.

The semiconductor products manufactured by Motorola's Semiconductor Products
Sector ("SPS") include integrated circuit devices (metal-oxide semiconductor,
gallium arsenide and bipolar) such as high-performance microprocessors,
microcontrollers and peripherals; digital signal processors; flash, electrically
erasable

programmable read-only, and proprietary fast static random access memories;
custom and proprietary bipolar and MOS digital-analog components; emitter-
coupled logic; programmable logic devices; deep submicron CMOS gate array, cell-
based and customizable standard products; rectifiers; zener and tuning diodes;
power and small signal transistors; RF and microwave devices, thyristors,
optoelectronics and sensors.

SPS sells its products worldwide to original equipment manufacturers and a
network of industrial distributors through its own sales force, agents and
distributors. Products manufactured by SPS are also supplied to other operating
units of Motorola. Other businesses of Motorola collectively constitute the
segment's largest customer, and the loss of, or a significant reduction in
purchases by, them has and could continue to affect SPS's results. Customers
are allowed to return merchandise for the longer of, (i) the product warranty
period of the distributor or (ii) three years. The segment and its results are
affected by the cyclical nature of the semiconductor industry. Available
capacity, cyclical customer demands, new product introductions and aggressive
pricing has and could continue to impact its business and results.

In 1997, the segment experienced underutilization of certain of its production
facilities due to reduced market demand. The segment's capacity for certain
other products is being increased to meet current market demand. In addition,
the segment supplements its internal manufacturing capacity with joint venture
manufacturing facilities and purchases of products from outside vendors.

The semiconductor industry is subject to rapid changes in technology, and
requires a high level of capital spending and an extensive research, development
and design program to maintain state-of-the-art technology. Accordingly, SPS
maintains an extensive research and development program in advanced
semiconductor technology and a significant portion of Motorola's capital
expenditures have historically been, and are expected to continue to be, for
semiconductor facilities.

The segment's backlog amounted to $1.77 billion at December 31, 1997 and $2.32
billion at December 31, 1996. Although the segment experienced a gradual
sequential quarterly increase in orders throughout the year, the backlog
declined due to a change in financial backlog reporting that recognizes,
financially, only those orders scheduled by Motorola for delivery within the
next quarter. Orders may be and are placed by customers for delivery up to 12
months in the future but for purposes of calculating backlog only the next 13
weeks requirements are reported. On a consistent basis, after accounting for
the change in reporting, backlog was up slightly for the year. In the
semiconductor industry, backlog quantities and shipment schedules under
outstanding purchase orders are frequently revised to reflect changes in
customer needs. Binding agreements calling for the sale of specific quantities
at specific prices are, typically, contractually subject to price or quantity
revisions and are, as a matter of industry practice, rarely formally enforced.
Therefore, the segment believes that most of its order backlog is cancellable.
For these reasons, the amount of backlog as of any particular date may not be an
accurate indicator of future results.

SPS experiences intense competition from numerous competitors ranging from
large companies offering a full range of products to small companies
specializing in certain segments of the market. The competitive environment
also is changing as a result of increased alliances between competitors. The
segment competes in many semiconductor markets, including the
telecommunications, personal computer/work station, industrial, transportation,
consumer, computer, and distributor markets. Due to the multitude of
competitors, price, service, technology, warranty, availability, time-to-market,
product features, company image and product quality are important factors in
competition. The ability to develop new products to meet customer requirements
and to meet customer delivery schedules also are competitive factors.
Management believes, looking forward, that Motorola's commitment to research and
development programs to improve existing products and to develop new products,
together with its utilization of state-of-the-art technology, should allow the
segment to remain competitive.

The segment is not currently experiencing any shortages in obtaining raw
materials. A significant portion of certain materials and parts used by SPS is
supplied from a single country. With respect to other materials, the segment is
seeking additional sources of supply to minimize the risk of obtaining materials
from only a few sources. Electricity, oil and natural gas are used extensively
in the segment's operations. All of these energy sources are available in
adequate quantities for current needs. Electricity and oil are the primary
energy sources for the segment's foreign operations, and presently, there are no
shortages of these sources although the reliability of

electrical power has been a problem from time to time. Difficulties in obtaining
any of the aforementioned items could affect SPS's results.

Reference is made to the material under the heading "General" for information
relating to patents and trademarks and seasonality of business with respect to
this industry segment.

The Semiconductor Products segment's headquarters are in Austin, Texas. Its
major facilities are located in Austin, Texas; Chandler, Mesa, Phoenix and
Tempe, Arizona; Irvine, California; Research Triangle Park, North Carolina;
Tianjin, China; Toulouse, France; Munich, Germany; Kwai Chung and Tai Po, Hong
Kong; Aizu, Sendai and Tokyo, Japan; Paju, Korea; Geneva, Switzerland; Tel Aviv,
Israel; Kuala Lumpur and Seremban, Malaysia; Guadalajara, Mexico; Carmona and
Manila, the Philippines; Singapore; Chung-Li, Taiwan; and East Kilbride and
South Queensferry, Scotland. In addition, a new site in West Creek, Virginia is
expected to begin construction in 1998.

Land Mobile Products

The Land Mobile Products Sector ("LMPS") designs, manufactures and sells
analog and digital two-way voice and data products and systems for a variety of
worldwide applications.

As a principal supplier of mobile and portable FM two-way radio products and
systems, LMPS provides equipment and systems to meet the communications needs of
individuals and many different types of business, institutional and governmental
organizations. Products of LMPS provide voice and data communications between
vehicles, persons and base stations. Also, LMPS provides network services for
two-way radio subscribers in international markets through joint ventures.

The principal customers for two-way radio products and systems include public
safety agencies, such as police, fire, highway maintenance departments and
forestry services; petroleum companies; gas, electric and water utilities;
telephone companies; diverse industrial companies; mining companies;
transportation companies such as railroads, airlines, taxicab operations and
trucking firms; institutions, such as schools and hospitals; and companies in
the construction, vending machine and service businesses. Also, there is an
emerging consumer two-way radio market using the products for personal and
family communication needs. These products are also sold and leased to various
federal agencies for many uses. Sales of iDEN(R) equipment to Nextel
Communications, Inc. represent a material part of the business of LMPS. The
impact of losing this customer could have a material adverse effect on the
performance of the segment. In addition, LMPS has a few customers that,
collectively, the loss of, or a significant reduction in purchases by, could be
material to its business.

Users of two-way radios are regulated by a variety of governmental and other
regulatory agencies throughout the world. In the United States, users of two-
way radios are licensed by the Federal Communication Commission ("FCC") which
has broad authority to make rules and regulations and prescribe restrictions and
conditions to carry out the provisions of the Communications Act of 1934. The
FCC has authorized two services and specific channels for consumer applications;
the General Mobile Radio Service requires a license for consumers while the
Family Radio Service does not require a license. The FCC's authority includes,
among other things, the power to classify radio stations, prescribe the nature
of the service to be rendered by each class of station, assign frequencies to
the various classes of stations and regulate the kinds of equipment which may be
used. Regulatory agencies in other countries have similar types of authority.
Consequently, the business and results of this segment could be affected by the
rules and regulations adopted by the FCC or regulatory agencies in other
countries from time to time. Motorola has developed products using trunking and
data communications technologies to enhance spectral efficiencies. The growth
and results of the two-way radio communications industry may be affected,
however, by the regulations of the FCC or other regulatory agencies relating to
the allocation of frequencies for land mobile communications users, especially
in urban areas where such frequencies are heavily used.

LMPS also manufactures and sells signaling and control systems and
communication control centers used in two-way radio operations. Additionally,
in 1997 LMPS announced a solutions portfolio of smart card products and

systems ranging from combination contacted/contactless cards, readers and
terminals, network infrastructure and system integration services that support
multiple smart card applications for customers worldwide.

This segment carries on an extensive product development program. Its
products make substantial use of solid-state semiconductor components, including
integrated circuits. Management believes, looking forward, that Motorola's
commitment to research and development programs for improving existing products
and services and developing new products and services, together with its
utilization of state-of-the-art technology, should allow this segment to remain
competitive.

The products manufactured and marketed by LMPS are sold directly through its
own distribution force, or through independent authorized distributors and
dealers, commercial mobile radio service operators and independent commission
sales representatives. The direct distribution force also provides system
engineering and technical services to meet the customer's particular needs. The
customer may choose to install and maintain the equipment with its own
employees, or may obtain installation, service and parts from a network of
Motorola authorized service stations (most of whom are also authorized dealers)
or from other non-Motorola service stations.

Leasing and conditional sale arrangements are also made available to
customers. The majority of the leases and conditional sale contracts entered
into by LMPS are sold to several unaffiliated finance companies and banks on
terms which, in some instances, provide recourse to Motorola with certain
limitations. In addition, a significant number of leases and conditional sale
contracts are sold to a Motorola finance subsidiary. Subscriber units are sold
directly and through indirect distribution channels. In certain circumstances,
LMPS permits customers to return products in accordance with industry practices.
LMPS provides custom products based on assembling basic units into a large
variety of models or combinations. This requires the stocking of inventories
and large varieties of piece parts as well as a variety of basic level
assemblies in order to meet short delivery requirements.

This segment's backlog amounted to $1.37 billion at December 31, 1997 and
$1.18 billion at December 31, 1996. The 1997 backlog amount is believed to be
generally firm, and approximately 93% of that amount is expected to be shipped
during 1998. This forward-looking estimate of the firmness of such orders is
subject to future events which may cause the percentage of the 1997 backlog
actually shipped to change.

This segment experiences widespread, intense competition from numerous
competitors ranging from some of the world's largest, diversified companies to
foreign state-owned telecommunications companies to many small, specialized
firms. Competitive factors for LMPS include: price, product performance,
product quality, quality and availability of service, and quality and
availability of systems engineering, with no one factor being dominant. An
additional factor is vendor financing because customers continue looking to
equipment vendors as one additional source of funding.

Availability of materials and components required by this segment is
relatively dependable and certain, but normal fluctuations in market demand and
supply could cause temporary, selective shortages and affect results. Direct
sourcing of materials and components from foreign suppliers is becoming more
extensive. LMPS operates certain offshore subassembly plants, the loss of one
or more of which could constrain its production capabilities and affect results.
Natural gas, electricity and, to a lesser extent, oil are the primary sources of
energy. Current supplies of these forms of energy are generally considered to
be adequate for this segment's United States and foreign operations. However,
difficulties in obtaining any of the aforementioned items could affect the
segment's results.

Patent protection is very important to the segment's business. Reference is
made to the material under the heading "General" for information relating to
patents and trademarks with respect to this segment.

This segment's headquarters are located in Schaumburg, Illinois, with major
manufacturing facilities in Schaumburg, Illinois; Plantation, Florida; Mount
Pleasant, Iowa; Swords, Ireland; Arad, Israel; Penang, Malaysia; Berlin,
Germany; and Tianjian, China.

Messaging, Information and Media Products

Motorola's Messaging, Information and Media Sector ("MIMS") manufactures,
distributes and sells paging subscriber, paging infrastructure, and related
products such as paging software and accessories. MIMS also provides network
services for paging and wireless data and gateway communication subscribers
through wholly owned and operated businesses as well as domestic and
international joint ventures. It also manufactures and sells modems, analog and
digital transmission devices and other data communication devices. In addition,
MIMS manufactures equipment that enables voice, video and high-speed data
communications over cable networks. It also offers handwriting and speech
recognition software for various applications. MIMS provides equipment and
systems to meet the communication needs of many different types of business,
institutional and governmental organizations. Also, there is a growing base of
paging and modem customers using the products for personal and family
communication needs. A majority of MIMS manufacturing, distribution and sales
occurs outside of the United States.

Radio frequencies are required to provide paging and wireless data information
services. The allocation of frequencies is regulated in the United States and
other countries throughout the world, and limited spectrum space is allocated
for these services. The growth of the paging and wireless data information
industry and this segment's results could be affected if adequate frequencies
are not allocated for its use, or alternatively, if new technology is not
developed to increase capacity on presently allocated frequencies.

MIMS products are sold worldwide through both domestic and international sales
organizations, which sell through direct and indirect channels such as
distributors, retailers and value-added resellers. Consistent with general
practices in the industry, under certain limited circumstances, the MIMS
businesses allow customer returns. Payment terms are set based upon industry
and regional practices for each product channel and extended payment terms are
granted temporarily only in rare cases. MIMS carries reasonable product
inventories to meet customer delivery requirements.

MIMS has a few customers that, collectively, the loss of, or a significant
reduction in purchases by, could have a material adverse effect on the results
of the segment.

This segment experiences widespread, intense competition from numerous
competitors ranging from some of the world's largest, diversified companies to
foreign state-owned telecommunications companies to many small, specialized
firms. The principal manufacturing operations of many competitors are located
outside of the United States which may serve to reduce their manufacturing costs
and enhance their brand recognition in their locale. Competitive factors for
MIMS include, but are not limited to, price, quality, time-to-market,
technology, company image, service, warranty, product features and availability.

The segment's backlog amounted to $428 million at December 31, 1997 and $775
million at December 31, 1996. The 1997 backlog is believed to be generally
firm, and approximately 100% of that amount is expected to be shipped during
1998. This forward-looking estimate of the firmness of such orders is subject
to future events, which may cause the percentage of the 1997 backlog actually
shipped to change.

Materials and components required by this segment are relatively dependable
and certain, but normal fluctuations in market demand and supply could cause
temporary, selective shortages. Occasionally, shortages or extended delivery
periods have occurred in various component parts, the effects of which have
generally been industry-wide and short in duration. Natural gas, electricity
and oil are the primary sources of energy necessary for the segment's
operations. These types of energy are currently readily available, but
difficulties in obtaining any of the aforementioned items could affect the
segment's results.

This segment's headquarters are located in Schaumburg, Illinois, with
manufacturing facilities in Huntsville, Alabama; Boynton Beach, Florida; Lake
Zurich, Illinois; Mansfield, Massachusetts; Ft. Worth, Texas; Tianjin, China;
Bangalore, India; Dublin, Ireland; Seoul, Korea; Chihuahua, Mexico; Vega Baja,
Puerto Rico; and Singapore; additionally, software development and
administration offices are located in Palo Alto, California; Alpharetta,
Georgia; Arlington Heights, Illinois; Bothell, Washington; Mississuaga, Canada
and Richmond, Canada.

OTHER PRODUCTS

Automotive, Component, Computer and Energy Sector

The Automotive, Component, Computer and Energy Sector ("ACCES") (formerly the
Automotive, Energy and Components Sector) manufactures and sells products in
four major categories: automotive and industrial electronics; energy storage
products and systems; printed circuit boards, ceramic and quartz electronic
components, and electronic fluorescent ballasts; and multi-function embedded
board and computer system products. As of January 19, 1998, ACCES now includes
the Motorola Computer Group ("MCG"), which develops, manufactures, sells and
services multi-function computer systems and board level products, together with
operating systems and system enablers based on the Motorola 68000, 88000,
PowerPC/TM/ series microprocessors, and Intel Pentium/TM/ microprocessors. In
addition, ACCES established a Flat Panel Display Division to develop the next
generation of flat panel displays and is involved in several joint ventures.

ACCES sells its automotive and industrial electronics products to original
equipment manufacturers, including foreign and domestic automobile
manufacturers, heavy vehicle manufacturers, farm equipment manufacturers and
industrial customers. The energy storage products business and the ceramic and
quartz products business sell primarily to other industry segments within
Motorola, principally the Land Mobile Products, Messaging, Information and Media
Products and Cellular Products segments. A large part of the Sector's business
is dependent upon the business of these other Motorola industry segments,
collectively, and two other external customers. The loss of any of these three
customers could have a material adverse effect on the business of ACCES.

MCG's products are sold worldwide to a variety of customers, some of whom
produce computer products which compete with MCG. MCG's products are marketed
to original equipment manufacturers and industrial distributors throughout the
world.

Demand for ACCES's automotive and industrial electronics products is linked to
automobile sales in the United States and other countries where ACCES sells its
products. Demand for MCG's products is linked to automation equipment
manufacturing in the United States and other countries where MCG sells its
products. The Sector (including MCG) experiences competition from numerous
global competitors including automobile manufacturers. Competitive factors in
the sale of ACCES's products (including MCG's products) include price, product
quality and performance, supply integrity, delivery, quality reputation,
experience, responsiveness and design and manufacturing technology. An
additional factor for MCG's products is the availability of software.

The Sector's backlog (including MCG) amounted to $309 million at December 31,
1997 and $330 million at December 31, 1996. The 1997 backlog for the Sector
(including MCG) is believed to be generally firm, and approximately 100% of that
amount is expected to be shipped during 1998. This forward-looking estimate of
the firmness of such orders is subject to future events which may cause the
percentage of the 1997 backlog actually shipped to change.

All materials used by ACCES in its operations have good availability at this
time. The Sector uses electricity and gas in its operations, which are
currently adequate in supply. However, difficulties in obtaining any of the
aforementioned items could affect ACCES's results.

Patent protection is important to the Sector's business and, in particular, is
very important to the business of the Flat Panel Display Division. Reference is
made to the material under the heading "General" for information relating to
patents and trademarks with respect to this Sector.

The Sector's headquarters are located in Northbrook, Illinois. It also has
manufacturing operations located in Scottsdale and Tempe, Arizona; Atlanta,
Georgia; Buffalo Grove, Schaumburg and Vernon Hills, Illinois; Albuquerque, New
Mexico; Elma, New York; Carlisle, Pennsylvania; Seguin, Texas; Tianjin, China;
San Jose, Costa Rica; Stotfold, England; Angers, France; Dublin, Ireland;
Penang, Malaysia; Singapore; and Chung-Li, Taiwan.

Space and Systems Technology Group

The Space and Systems Technology Group ("SSTG") (part of the Cellular Networks
and Space Sector) is engaged in the design, development and production of
advanced electronic communication systems and products for a host of
international and domestic commercial and government users. The emphasis of
SSTG is to be a premier systems developer and integrator. SSTG provides
electronic and communications equipment products that have various applications
based upon customer requirements of the Group's business segments including
government and satellite communications.

SSTG's government business operations primarily perform research, development
and production work under contracts with governmental agencies, but also conduct
independent research and development programs. They produce diversified
military electronic equipment, including military communications equipment, data
links, display systems, missile guidance equipment, electronic ordnance devices
and drone electronic systems. The government business operations have been
predominantly dependent on the United States Government as the main customer,
acting as either a prime contractor or a subcontractor to other prime
contractors. The total loss of this business could have a material adverse
effect on SSTG. Contracts are secured from United States Government agencies
and their suppliers by negotiation and competitive bids. The government
acquisition environment is highly regulated and continues to be more
competitive. Competition has increased substantially in all aspects of the
government business due to a reduction and slowdown in acquisition resulting
from a lower defense budget. Competitors include large and small technically
competent firms. Some competitors from whom the government business operations
procured subcontract work in the past are becoming more vertically integrated
and are performing the work previously subcontracted. The government business
operations expect to continue to meet competition on the basis of price and
quality of product performance. Additionally, they are looking to leverage
growth by applying their core technologies to commercial opportunities.

The satellite communications business, Satellite Communications Group ("SCG"),
designs, builds, and markets space-based telecommunications systems. Currently,
SCG is fulfilling the terms of a contract with Iridium LLC, an entity of which
Motorola owns approximately 20%, to build and deploy a satellite communications
network, known as IRIDIUM(R), as well as undertaking research and development on
other communications systems. The IRIDIUM system is being designed to provide
global digital service to handheld telephones and related equipment. The
IRIDIUM system involves four components: (1) a constellation of low earth orbit
satellites, (2) centralized system control centers, (3) approximately ten
gateways located throughout the world; and (4) individual subscriber units for
voice, data, facsimile and paging. SCG is the prime contractor under contracts
with Iridium LLC to provide and launch the satellites, construct the centralized
system control centers and gateways; maintain the performance of the
constellation and provide certain computer systems and software for the system.

No low-earth orbit, worldwide satellite-based communications network currently
exists for general public use, although a few are planned by competitors.
Competition for these systems is generally on the basis of first-to-market,
available geographical coverage and quality and reliability of service. As of
December 31, 1997, Motorola had successfully manufactured and deployed 46
satellites for the 66 satellite constellation for the IRIDIUM system. Of the 46
satellites in orbit, 44 were operational.

Motorola has executed three contracts with Iridium LLC for the construction
and operation of the global communications system, providing for payments to
Motorola over a ten-year period which began in 1993. Motorola has in turn
entered into significant subcontracts for portions of the system, for which it
will remain contractually and

financially obligated even if Iridium LLC is unable to satisfy the terms of the
contracts with Motorola, including funding. During the last five years, these
contracts for IRIDIUM development effort have become a significant portion of
SSTG's business and are expected to remain a major contributor to SSTG's sales
for the next several years. Iridium LLC's failure to make payments under these
contracts or the loss of this business could have a material adverse effect on
SSTG.

Total sales for SSTG include sales made to a number of governments and
corporations. Products of SSTG are marketed outside the United States by a few
distributors, by independent representatives, and by SSTG's own sales force. In
1997, a small percentage (approximately 4%) of SSTG's business was conducted
internationally, primarily through the government business operations. These
sales generally relate to the development and deployment of defense, security,
and commercial air traffic management systems with selected countries,
concentrated in the Asia-Pacific region, Europe and Canada.

SSTG customer returns, when allowed, provide for only repair or replacement of
products under warranty. The U.S. Government requests warranty coverage for
essential performance requirements along with design and manufacturing
requirements on those systems used to carry out combat and support missions.
SSTG does not carry significant amounts of inventory to meet delivery
requirements of customers because it has not experienced serious source supply
issues.

SSTG's backlog amounted to $1.48 billion at December 31, 1997 and $1.02
billion at December 31, 1996. The 1997 backlog is believed to be generally firm
and 86% of that amount is expected to be shipped during 1998. All contracts
with the United States Government are subject to cancellation at the convenience
of the Government, and the contracts with Iridium LLC may be terminated by
Iridium LLC pursuant to the terms set forth in the contracts. The forward-
looking estimate of the firmness of the 1997 backlog as discussed above is
subject to future events which may cause the percentage of the 1997 backlog
actually shipped to change.

Materials used by SSTG in its operations are generally available. Natural gas
and electricity are the principle types of energy used, and availability of both
to SSTG is currently adequate. Difficulties in obtaining any of the
aforementioned items could affect SSTG's results.

Patents continue to become more important to SSTG as competition increases in
a declining United States Government market and as SSTG expands commercial
opportunities. Reference is made to the material under the heading "General"
for information related to patents and trademarks.

The Group has its headquarters in Scottsdale, Arizona, with manufacturing
facilities in Scottsdale and Chandler, Arizona.

General

Customers. Motorola is not dependent for a material part of its overall
business upon a single or a very few customers. Approximately 2.8% of
Motorola's total sales and revenues in 1997 were received from various branches
and agencies, including the armed services, of the United States Government.

All contracts with the United States Government are subject to cancellation at
the convenience of the Government.

Government contractors, including Motorola, are routinely subjected to
numerous audits and investigations, which may be either civil or criminal in
nature. The consequences of these audits and investigations may include
administrative action to suspend business dealings with the contractor and to
exclude it from receiving new business. In addition, Motorola, like other
contractors, is internally reviewing aspects of its government contracting
operations, and, where appropriate, taking corrective actions and making
voluntary disclosures to the Government. These audits and investigations could
adversely affect Motorola and its results.

Backlog. Motorola's aggregate backlog position, including the backlog
position of subsidiaries through which some of its business units operate, as of
the end of the last two fiscal years, was approximately as follows:

December 31, 1997................................$7.55 billion
December 31, 1996................................$7.57 billion

Except as previously discussed in this Item 1(c), the orders supporting the
1997 backlog amounts shown in the foregoing table are believed to be generally
firm, and approximately 96% of orders on hand at December 31, 1997 are expected
to be shipped during 1998. However, this is a forward-looking estimate of the
amount expected to be shipped, and future events may cause the percentage
actually shipped to change.

The Semiconductor Products segment's backlog position declined due to the
change in financial backlog reporting described previously in Item 1(c). In
addition, the aggregate backlog position for 1996 has been revised to reflect
the change in financial backlog reporting methodology implemented by certain
business units in 1997.

Motorola uses the percentage-of-completion method to recognize revenues and
costs associated with most long-term contracts. For contracts involving certain
technologies, revenues and profits, or parts thereof, are deferred until
technological feasibility is established and customer acceptance is obtained.
For other product sales, revenue is recognized at the time of shipment, and
reserves are established for price protection and cooperative marketing programs
with distributors.

Research and Development. Throughout its history, Motorola has relied, and
continues to rely, primarily on its research and development programs for the
development of new products and its production engineering capabilities for the
improvement of existing products. Technical data and product application ideas
are exchanged among Motorola's industry segments on a regular basis. Research
and development expenditures relating to new product development or product
improvement, other than customer-sponsored contracts, were approximately $2,748
million in 1997, $2,394 million in 1996 and $2,197 million in 1995.

In addition, research funded under customer-sponsored contracts amounted to
approximately $616 million in 1997, $758 million in 1996 and $546 million in
1995.

Approximately 16,700 professional employees were engaged in such research
activities (including customer-sponsored contracts) during 1997.

Patents and Trademarks. Motorola owns 9,252 patents in the United States and
9,870 in foreign countries. These foreign patents are counterparts of
Motorola's United States patents. During 1997, Motorola was granted 1,208
United States patents. Many of the patents owned by Motorola are used in its
operations or licensed for use by others, and Motorola is licensed to use
certain patents owned by others. In some instances, certain of the patents
licensed by Motorola to others have generated significant amounts of revenue to
Motorola.

Motorola considers its trademark "MOTOROLA" and the "M Symbol" logo to be
valuable assets. These are protected through trademark registrations. Other
trademarks of Motorola are protected and registered in the relevant markets, but
are used only on limited product lines.

Environmental Quality. Motorola operations are from time to time the subjects
of investigations, conferences, discussions and negotiations with various
federal, state and local environmental agencies with respect to the discharge or
cleanup of hazardous waste and compliance by those operations with environmental
laws and regulations. The balance of the response to this section of Item 1
incorporates by reference the information contained in Note 7, "Commitments and
Contingencies," of the Notes to the Consolidated Financial Statements under the
caption "Environmental and Legal" contained in the attachment to Motorola's
Proxy Statement for the 1998 annual meeting of stockholders.

Miscellaneous. At December 31, 1997, there were approximately 150,000
employees of Motorola and its subsidiaries. The business of Motorola and its
industry segments has certain seasonal characteristics: the Semiconductor
Products segment has tended to have stronger, seasonally-adjusted sales in the
first half of the year; and sales of products, such as cellular telephones and
pagers, in consumer markets tend to increase in the fourth quarter. An increase
or decrease in large system orders in the Cellular Infrastructure Group and the
Land Mobile Products segment could cause volatility in orders, revenues and
profits recognized in any particular period.

Business Risk Factors. Except for historical matters, the matters discussed
in this Form 10-K are forward-looking statements that involve risks and
uncertainties. Forward-looking statements include, but are not limited to,
statements under the following headings; (i) "Cellular Products," about the
allocation and regulation of frequencies, development of technologies, expected
shipments during 1998, the loss of material customers, competitiveness through
research and development and utilization of technology and the availability of
supplies; (ii) "Semiconductor Products," about the loss of or reduction in
purchases by customers, the impact of available capacity, cyclical customer
demands, new product introductions and aggressive pricing, expected shipments
during 1998, backlog, competitiveness through research and development and
utilization of technology, the availability of supplies and the construction of
new facilities; (iii) "Land Mobile Products," about the loss of material
customers, the allocation and regulation of frequencies, expected shipments
during 1998, competitiveness through research and development and utilization of
technology and the availability of supplies; (iv) "Messaging, Information and
Media Products," about the allocation of frequencies, development of
technologies, competitiveness through research and development and utilization
of technology, expected shipments during 1998, the loss of material customers
and the availability of supplies; (v) "Automotive, Component, Computer and
Energy Sector," about the loss of material customers, expected shipments during
1998 and the availability of supplies; (vi) "Space and Systems Technology
Group," about the loss of material customers, competitiveness, the impact of
Motorola's investment in Iridium LLC, expected shipments during 1998 and the
availability of supplies; and (vii) "General," about expected shipments during
1998, seasonality, and large system orders.

Motorola wishes to caution readers that in addition to the important factors
described elsewhere in this Form 10-K, the following important factors, among
others, sometimes have affected, and in the future could affect, Motorola's
actual results and could cause Motorola's actual consolidated results during
1998, and beyond, to differ materially from those expressed in any forward
looking statements made by, or on behalf of, Motorola:

. Motorola's actions in connection with continued and increasing price and
product competition in many product areas, including, but not limited to
semiconductor products, digital cellular subscriber products and cellular
infrastructure equipment, paging and messaging products and infrastructure
and the impact on sales margins for those items;

. Difficulties or delays in the development, production, testing and
marketing of products, including, but not limited to, a failure to ship new
products and technologies when anticipated, such as two-way and voice
paging, CDMA for cellular and PCS systems, wireless local loop products,
flat panel display products, products for transmission of telephony and
high-speed data over hybrid fiber coaxial cable systems, integrated digital
radios, smart cards and other semiconductor products; the failure of
customers to accept these products or technologies when planned,
particularly as Motorola's focus on the consumer market increases; any
defects in products; Motorola's inability to differentiate its products;
and a failure of manufacturing economies to develop when planned;

. Risks related to the trend towards increasingly large system contracts for
CIG, LMPS and SSTG infrastructure equipment and the resulting reliance on
large customers; the technological risks of such contracts, especially when
the contracts involve new technology such as CDMA; and financial risks to
Motorola under these contracts, including the difficulty of projecting
costs associated with large contracts;

. The ability of Motorola's cellular businesses to continue their transition
to digital technologies and successfully compete in those businesses and
retain or gain market share;

. The outcome of various efforts to stabilize economic conditions in Asia;
China's actions with respect to the valuation of its currency; the
potential that the weak economic conditions in Southeast Asia could spread
to other countries where Motorola does a sizable amount of business,
including China and Japan;

. Because more than half of Motorola's sales are outside the U.S., Motorola's
results could be significantly affected by weak economic conditions in
countries in which it does sizable business and emerging markets in which
there tend to be significant growth and by changes in foreign currency
exchange rates affecting those countries;

. Increasing demand for vendor financing of equipment sales, particularly for
infrastructure equipment sold by CIG, LMPS and the Messaging Systems
Products Group ("MSPG"), and the ability of these businesses to provide
financing on competitive terms with other vendors;

. The ability of Motorola to recruit and retain engineers and other highly-
skilled personnel;

. The ability of Motorola's semiconductor business to compete in the highly
competitive semiconductor market. Factors that could affect Motorola's
ability to compete are production inefficiencies and higher costs related
to underutilized facilities, both wholly-owned and joint venture
facilities; shortage of manufacturing capacity; start-up expenses,
inefficiencies and delays and increased depreciation costs in connection
with the capital investments in 1998 for facilities in Arizona, Virginia,
Brazil, China and Germany; competitive factors, such as rival chip
architectures, mix of products, acceptance of new products and price
pressures; risk of inventory obsolescence due to shifts in market demand;
and the effect of orders from Motorola's equipment businesses such as CSS,
CIG, LMPS and MSPG;

. The risks related to the IRIDIUM(R) project including: the ability of
gateway investors to timely obtain licenses and sign agreements for, and to
market, the service, to timely receive and, as appropriate, operate and
sell telecommunications equipment and to otherwise timely finance and
operate a successful telecommunications business; the successful and timely
orbiting of the project's low-earth orbit satellites and the successful and
timely operation of such satellites and related ground equipment; the
ability of Iridium LLC to meet its financing needs during at least the next
few years to continue to make contractual payments to Motorola and to make
debt payments and otherwise operate; the risks associated with the large
IRIDIUM systems contracts and the financial risk to Motorola under those
contracts, including the difficulty in projecting costs associated with
those contracts; the market acceptance (both on its own and when compared
to possible competitors) of what is expected to be the first worldwide
global satellite-based communications service and of the related equipment;
and the significant technological and other risks associated with the
development and commercial operation of the project, including any software
and support systems-related risks;

. Unanticipated impact of Year 2000 issues, particularly the failure of
products from major suppliers to function properly in the Year 2000;

. The effects of, and changes in, laws and regulations, other activities of
governments, agencies and similar organizations, including, but not limited
to, those affecting frequency, use and availability of spectrum
authorizations and licensing; and

. The costs and other effects of legal and administrative cases and
proceedings (whether civil, such as environmental and product-related, or
criminal), settlements and investigations, claims, and changes in those
items, and developments or assertions by or against Motorola relating to
intellectual property rights and intellectual property licenses.

Certain portions of Motorola's Proxy Statement for the 1998 annual meeting of
stockholders with Management's Discussion and Analysis and Consolidated
Financial Statements are incorporated by reference into this Form 10-K. There
are additional important factors included therein, including those on pages F-8
and F-9 of the attachment to

Motorola's Proxy Statement for the 1998 annual meeting of stockholders, that
sometimes have affected, and in the future could affect, Motorola's actual
results and could cause Motorola's actual consolidated results during 1998, and
beyond, to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, Motorola.

(d) Financial information about foreign and domestic operations and export
sales.

Domestic export sales to third parties were $3.98 billion in 1997, $3.74
billion in 1996 and $3.59 billion in 1995. Domestic export sales to affiliates
were $6.86 billion in 1997, $6.31 billion in 1996 and $6.64 billion in 1995.

The remainder of the response to this section of Item 1 incorporates by
reference Note 7, "Commitments and Contingencies," of the Notes to the
Consolidated Financial Statements and the "1997 Compared With 1996" and "1996
Compared With 1995" sections of Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the attachment to
Motorola's Proxy Statement for the 1998 annual meeting of stockholders.

IRIDIUM(R) is a registered trademark and service mark of Iridium LLC.
PowerPC(TM) is a trademark of IBM Corporation, used under license.

Item 2: Properties

Motorola's principal executive offices are located at 1303 East Algonquin
Road, Schaumburg, Illinois 60196. Its other major facilities in the United
States are located in Arlington Heights, Buffalo Grove, Harvard, Lake Zurich,
Libertyville, McHenry, Northbrook, Schaumburg and Vernon Hills, Illinois; Elma,
New York; Phoenix, Chandler, Scottsdale, Mesa and Tempe, Arizona; Boynton Beach
and Plantation, Florida; Lawrenceville, Georgia; Austin, Ft. Worth and Seguin,
Texas; Mount Pleasant, Iowa; Mansfield, Massachusetts; Huntsville, Alabama;
Research Triangle Park, North Carolina; Albuquerque, New Mexico; Carlisle,
Pennsylvania; and Irvine and San Jose, California. Motorola also operates
manufacturing facilities or sales offices in 58 other countries. (See
"Narrative Description of Business" for information regarding the location of
the principal manufacturing facilities for each industry segment.) Motorola
owns 126 facilities (manufacturing, sales, service and office), 65 of which are
located in North America and 61 of which are located in other countries.
Motorola leases 756 such facilities, 385 which are located in North America and
371 which are located in other countries.

Motorola generally considers the productive capacity of the plants operated by
each of its industry segments adequate and suitable for the requirements of each
business group. New semiconductor product manufacturing facilities are under
construction in Richmond, Virginia and Xi-Qing, China and an expansion of the
semiconductor product manufacturing facilities in Chandler, Arizona is underway.
A new manufacturing facility for cellular subscriber products is being
constructed in Flensburg, Germany and a new manufacturing facility for cellular
infrastructure products is being built in Swindon, U.K. A new manufacturing
facility that is expected to be shared by a number of Motorola business units is
being constructed in Jaguariuna, Brazil and the iDEN(R) manufacturing facility
in Plantation, Florida is being expanded. A new semiconductor product
manufacturing facility in West Creek, Virginia is expected to begin construction
in 1998.

The extent of utilization of such manufacturing facilities varies from plant
to plant and from time to time during the year.

Item 3: Legal Proceedings

Motorola is currently a named defendant in seven cases arising out of alleged
groundwater, soil and air pollution in Phoenix and Scottsdale, Arizona.
McIntire et al. v. Motorola remains pending in the U.S. District Court for the
District of Arizona, while Baker et al. v. Motorola et al., Lofgren et al. v.
Motorola et al., Bentancourt et al. v. Motorola et al., Ford et al. v. Motorola
et al., Wilkins et al. v. Motorola et al and Dawson et al. v. Motorola, et al.
are pending in the Arizona Superior Court, Maricopa County. The McIntire
lawsuit, filed on December 20, 1991,

involves approximately 920 plaintiffs who allege that the operations of Motorola
at several facilities in Phoenix and Scottsdale, Arizona have caused property
damage and health problems by contaminating the soil, groundwater and air in the
area surrounding those facilities. The Baker lawsuit, filed on February 11,
1992, is a class action, involving six representative individual named
plaintiffs, alleging that Motorola and 27 other defendants contaminated the
soil, air and groundwater in the Phoenix/Scottsdale area, diminishing property
values and exposing members of the class to possible adverse health effects. On
August 24, 1994, the Baker court certified two classes, a property damage class
consisting of all persons who since 1987 were residents, property owners or
lessees of property which overlies, or is adjacent to, the alleged groundwater
pollution, and a medical monitoring class consisting of all persons who resided
in Phoenix and/or Scottsdale for more than one year continuously during the
years between 1955 and 1989, and who received potable drinking water containing
trichloroethylene at a level equal to or exceeding 2.0 parts per billion, on
average. The Lofgren, Bentancourt, Ford, Wilkins and Dawson lawsuits, filed on
April 6, 1993, July 16, 1993, June 10, 1994, July 19, 1995 and August 7, 1997,
respectively, have been consolidated. The consolidated cases involve more than
200 plaintiffs, alleging that Motorola and about 25 other defendants
contaminated the soil, air and groundwater in the Phoenix/Scottsdale area,
causing health problems. A portion of the consolidated Lofgren cases is set to
begin trial on June 2, 1998. The June trial will involve 18 plaintiffs with
direct personal injury claims and 19 plaintiffs whose claims are derivative of
the direct injury claims (e.g. loss of consortium claims).

All seven pending lawsuits described above seek compensatory and punitive
damages. The McIntire complaint includes personal injury and property damage
claims and seeks injunctive relief. The Baker complaint seeks damages for
medical monitoring and alleges claims for property, business and economic loss
and seeks declaratory and injunctive relief. Lofgren and Dawson involve claims
for personal injury.

A class action, In Re Nextel Communications Securities Litigation, against
Nextel Communications, Inc., certain of its officers and directors and Motorola
for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and SEC Rule 10b-5, is pending in the United States District Court
for the District of New Jersey. The pending complaint, a consolidation of cases
previously filed against Nextel, was filed on July 11, 1995 and maintains that
the defendants artificially inflated the price of Nextel common stock through a
series of alleged misrepresentations and omissions. Plaintiffs propose a class
period of July 22, 1993 through January 10, 1995 and seek an unspecified amount
of monetary damages.

Motorola and several of its directors and officers are named defendants in a
consolidated class action for alleged violations of Sections 10(b) and 20(a) of
the Securities Exchange Act and SEC Rule 10b-5, Kaufman, et. al. v Motorola,
Inc., et. al., which was filed on May 19, 1995 and is pending in the U.S.
District Court for the Northern District of Illinois. Plaintiffs claim that
Motorola and the individual defendants inflated the price of Motorola stock by
failing to timely disclose a buildup of cellular phone inventory with its
distributors. The district court has certified a class consisting of purchasers
of Motorola common stock during the period of November 4, 1994 through February
17, 1995. Plaintiffs seek an unspecified amount of damages.

Motorola has been a defendant in several cases arising out of Motorola's
manufacture and sale of portable cellular telephones. Schiffner v. Motorola,
Inc., filed on March 3, 1995 in the Circuit Court of Cook County, Illinois, is
an economic loss purported class action by purchasers of portable cellular
phones. On June 16, 1997, Schiffner was dismissed, with prejudice, by the Cook
County, Illinois Circuit Court. Plaintiff's appeal of that dismissal is
pending. Jerald P. Busse, et al. v. Motorola, Inc. et al., filed on October 26,
1995 in the Circuit Court of Cook County, Illinois, Chancery Division, is a
purported class action alleging that defendants have failed to adequately warn
consumers of the alleged dangers of cellular telephones and challenging ongoing
safety studies as invasions of privacy. All claims except the invasion of
privacy claims have been dismissed on defendants' motion. Rittmann, et al. v.
Motorola, Inc., et al., a case in the 151st District Court of Harris County,
Texas, alleging that brain cancer was caused by or aggravated by the use of a
cellular telephone was dismissed, without prejudice, on November 18, 1997. Kane,
et al., v. Motorola, Inc., et al., filed on December 13, 1993 in the Circuit
Court of Cook County, Illinois, alleges that plaintiffs' brain cancer was caused
by or aggravated by a prototype communication device.

Pennsylvania Bancshares, Inc. et al. v. Motorola, Inc., et al., filed on
October 10, 1995 in the Court of Common Pleas, Montgomery County, Pennsylvania,
is a purported class action wherein it is alleged that Motorola, Inc.

systematically engages in deceptive trade practices, including without
limitation, intentionally misrepresenting the quality of certain types of
cellular telephones. Silber, et. al. v. Motorola, Inc., et al., filed on August
1, 1995 in the Supreme Court of The State of New York, County of Suffolk, which
was transferred from the County of New York, is an action wherein it is alleged
that a traffic accident was caused by the use of a cellular phone.

The information contained in Note 7, "Commitments and Contingencies," of the
Notes to the Consolidated Financial Statements under the caption "Environmental
and Legal" contained in the attachment to Motorola's Proxy Statement for the
1998 annual meeting of stockholders is incorporated herein by reference.

Motorola is a defendant in various other suits, claims and investigations
which arise in the normal course of business. In the opinion of management, the
ultimate disposition of these matters, including those matters described above
in this Item 3, will not have a material adverse effect on the consolidated
financial position, liquidity or results of operations of Motorola.

Item 4: Submission of Matters to a Vote of Security Holders

Not applicable.

Executive Officers of the Registrant

Following are the persons who were the executive officers of Motorola as of
December 31, 1997, their ages as of December 31, 1997, their current titles and
positions held during the last five years:

Gary L. Tooker; age 58; Chairman of the Board since January 1997; Vice
Chairman of the Board and Chief Executive Officer from December 1993 to January
1997; President and Acting Chief Executive Officer from October 1993 to December
1993; and President and Chief Operating Officer from January 1990 to October
1993.

Christopher B. Galvin; age 47; Chief Executive Officer since January 1997;
President and Chief Operating Officer from December 1993 to January 1997; and
Senior Executive Vice President and Assistant Chief Operating Officer from
January 1990 to December 1993.

Robert W. Galvin; age 75; Chairman of the Executive Committee of the Board of
Directors since January 1990.

Keith J. Bane; age 58; Executive Vice President and President, Americas Region
since March 1997; Executive Vice President and Chief Corporate Staff Officer
from February 1995 to March 1997; Senior Vice President and Chief Corporate
Staff Officer from August 1994 to February 1995; Senior Vice President and
Motorola Director of Strategy, Technology and External Relations from October
1993 to August 1994; and Senior Vice President and Motorola Director of Strategy
from November 1988 to October 1993.

Robert L. Barnett; age 57; Executive Vice President and President, Land Mobile
Products Sector since March 1997; Senior Vice President, President and General
Manager, Land Mobile Products Sector from March 1996 to March 1997; Corporate
Vice President and General Manager, iDEN Group, Land Mobile Products Sector from
May 1995 to March 1996.

Arnold S. Brenner; age 60; Executive Vice President and President, Global
Government Relations and Standards since 1997; Executive Vice President and
General Manager, Japan Group from November 1988 to 1997.

Glenn A. Gienko; age 45; Executive Vice President and Motorola Director of
Human Resources since May 1996; Senior Vice President and Director of Human
Resources from June 1995 to May 1996; Corporate Vice President - Human
Resources, General Systems Sector from February 1994 to June 1995; and Vice
President - Human Resources, General Systems Sector from June 1990 to February
1994.

Merle L. Gilmore; age 49; Executive Vice President and President, Motorola
Europe, Middle East and Africa since March 1997; Executive Vice President,
President and General Manager, Land Mobile Products Sector ("LMPS") from July
1994 to March 1997; Senior Vice President and President and General Manager,
LMPS, from June 1994 to July 1994; and Senior Vice President and Assistant
General Manager, LMPS, from July 1992 to June 1994.

Robert L. Growney; age 55; President and Chief Operating Officer since January
1997; Executive Vice President, President and General Manager, Messaging,
Information and Media Sector from January 1994 to January 1997; and Executive
Vice President and General Manager, Paging and Wireless Data Group from
September 1992 to January 1994.

Carl F. Koenemann; age 59; Executive Vice President and Chief Financial
Officer since December 1991.

Ferdinand C. Kuznik; age 56; Executive Vice President and President, Cellular
Subscriber Sector since August 1997; Senior Vice President and General Manager,
Communications & Electronics Group, Land Mobile Products Sector from 1993 to
August 1997.

A. Peter Lawson; age 51; Senior Vice President, General Counsel and Secretary
since November 1996; Senior Vice President and General Counsel from March 1996
to November 1996; Senior Vice President and Assistant General Counsel from
November 1994 to March 1996; Corporate Vice President and Assistant General
Counsel from November 1987 to November 1994.

James A. Norling; age 55; Executive Vice President and President, Messaging,
Information and Media Sector since January 1997; Executive Vice President and
President, Motorola Europe, Middle East and Africa from April 1993 to December
1996; and Executive Vice President, President and General Manager, Semiconductor
Products Sector from December 1989 to April 1993.

Hector Ruiz; age 52; Executive Vice President and President, Semiconductor
Products Sector since May 1997; Executive Vice President, Office of the
President, SPS from February 1997 to May 1997; Executive Vice President and
General Manager, Messaging Systems Products Group, Messaging Information and
Media Sector from April 1996 to February 1997; Executive Vice President and
General Manager, Paging Products Group, Messaging Information and Media Sector
from 1994 to April 1996; and Senior Vice President and General Manager, Paging
Products Group, Paging and Telepoint Systems Group from 1991 to 1994.

Jack Scanlon; age 55; Executive Vice President and President, Cellular
Networks and Space Sector since January 1997; Executive Vice President and
General Manager, Cellular Infrastructure Group, General Systems Sector from
February 1995 to January 1997; Senior Vice President and General Manager,
Cellular Infrastructure Group, General Systems Sector from August 1992 to
February 1995.

Frederick T. Tucker; age 57; Executive Vice President and President,
Automotive, Component, Computer and Energy Sector since September 1992.

Richard W. Younts; age 58; Executive Vice President and President, Asia
Pacific Region since 1997; Executive Vice President and Corporate Executive
Director International-Asia and Americas from December 1993 to 1997; and Senior
Vice President and Corporate Executive Director, International-Asia and Americas
from July 1991 to December 1993.

The above executive officers will serve as officers of Motorola until the
regular meeting of the Board of Directors in May 1998 or until their respective
successors shall have been elected except as noted above. Christopher B. Galvin
is a son of Robert W. Galvin. There is no family relationship between any of
the other executive officers listed above.

PART II

Item 5: Market for Registrant's Common Equity and Related Stockholder Matters

Motorola's Common Stock is listed on the New York, Chicago, London and Tokyo
Stock Exchanges. The remainder of the response to this Item incorporates by
reference the information under the caption "Quarterly and Other Financial Data"
of Motorola's Consolidated Financial Statements contained in the attachment to
Motorola's Proxy Statement for the 1998 annual meeting of stockholders.

Item 6: Selected Financial Data

The response to this Item incorporates by reference the information under the
caption "Five-Year Financial Summary" of Motorola's Consolidated Financial
Statements contained in the attachment to Motorola's Proxy Statement for the
1998 annual meeting of stockholders.

Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations

The response to this Item incorporates by reference the information under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" contained in the attachment to Motorola's Proxy Statement for the
1998 annual meeting of stockholders.

Item 8: Financial Statements and Supplementary Data

The response to this Item incorporates by reference the information under the
captions "Management's Responsibility For Financial Statements," "Independent
Auditors' Report," "Consolidated Statements of Earnings," "Consolidated
Statements of Stockholders' Equity," "Consolidated Balance Sheets,"
"Consolidated Statements of Cash Flows," "Supplemental Cash Flow Information,"
"Notes to Consolidated Financial Statements," "Five-Year Financial Summary" and
"Quarterly and Other Financial Data" of Motorola's Consolidated Financial
Statements contained in the attachment to Motorola's Proxy Statement for the
1998 annual meeting of stockholders.

Item 9: Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

None.

PART III

Item 10: Directors and Executive Officers of the Registrant

The response to this Item required by Item 401 of Regulation S-K, with respect
to directors, incorporates by reference the information under the caption
"Nominees" on pages 1 through 5 of Motorola's Proxy Statement for the 1998
annual meeting of stockholders and with respect to executive officers, is
contained in Part I hereof under the caption "Executive Officers of the
Registrant". The response to this Item required by Item 405 of Regulation S-K
incorporates by reference the information under the caption "Section 16(a)
Beneficial Ownership Reporting Compliance" on page 23 of Motorola's Proxy
Statement for the 1998 annual meeting of stockholders.

Item 11: Executive Compensation

The response to this Item incorporates by reference the information under the
caption "Director Compensation" on pages 6 and 7 of Motorola's Proxy Statement
for the 1998 annual meeting of stockholders and "Summary Compensation Table,"
"Stock Option Grants in 1997," "Aggregated Option Exercises in 1997 and 1997
Year-End Option Values," "Long-Term Incentive Plans - Awards in 1997," "Pension
and Supplementary Retirement Plans," and "Termination of Employment and Change
in Control Arrangements" on pages 9 - 13 of Motorola's Proxy Statement for the
1998 annual meeting of stockholders.

Item 12: Security Ownership of Certain Beneficial Owners and Management

The response to this Item incorporates by reference the information under the
caption "Security Ownership of Management of the Company" on page 8 of
Motorola's Proxy Statement for the 1998 annual meeting of stockholders.

Item 13: Certain Relationships and Related Transactions

The response to this Item incorporates by reference the relevant information
under the caption "Director Compensation" on page 7 of Motorola's Proxy
Statement for the 1998 annual meeting of stockholders.

PART IV

Item 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) 1. Financial Statements

See Part II, Item 8 hereof.

2. Financial Statement Schedule and Auditors' Report

Title Schedule
----- --------

Valuation and Qualifying Accounts............................. II

All schedules omitted are inapplicable or the information required is
shown in the Consolidated Financial Statements or notes thereto. The
auditors' report of KPMG Peat Marwick LLP with respect to the
Financial Statement Schedule is located at page 20.

3. Exhibits

Exhibits required to be attached by Item 601 of Regulation S-K are
listed in the Exhibit Index attached hereto, which is incorporated
herein by this reference. Following is a list of management contracts
and compensatory plans and arrangements required to be filed as
exhibits to this form by Item 14(c) hereof:

Motorola Executive
Incentive Plan ("MEIP")
Motorola Long Range Incentive Plan of 1994
Share Option Plan of 1982
Share Option Plan of 1991
Share Option Plan of 1996
Motorola Elected Officers Supplementary Retirement Plan
Executive Health Plan Accidental Death and
Dismemberment Insurance for MEIP Participants
Arrangement for Directors' Fees
Retirement Plan for Non- Employee Directors
Deferred Fee Plan for Outside Directors
Motorola Non-Employee Directors Stock Plan
Officers' Group Life Insurance Policy
Consultant Agreement with John F. Mitchell
Form of Termination Agreement
Policy Protecting Salary and Medical Benefits
Insurance Policy for Non-Employee Directors

(b) Reports on Form 8-K.

Motorola filed no reports on Form 8-K during the last quarter of 1997.

See Item 14(a)3 above.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders of Motorola, Inc.:

Under date of January 12, 1998, we reported on the consolidated balance sheets
of Motorola, Inc. and subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1997, as
contained in the 1998 proxy statement to stockholders. These consolidated
financial statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year 1997. In connection with our audits of
the aforementioned consolidated financial statements, we also have audited the
related financial statement schedule as listed in Part IV, Item 14(a)2. The
financial statement schedule is the responsibility of Motorola's management.
Our responsibility is to express an opinion on the financial statement schedule
based on our audits.

In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.

/s/ KPMG Peat Marwick LLP

January 12, 1998
Chicago, Illinois

SCHEDULE II

MOTOROLA, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
Three Years Ended December 31, 1997
(In millions)

Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Additions
----------------------
Balance at Charged to Charged to Balance at
beginning costs & other end of
period expenses accounts Deductions period
---------- ---------- ---------- ---------- ----------

1997
Allowance for doubtful accounts............... $137 $75 --- $39 (1) $173
Product and service warranties................ $314 $218 --- $195 (2) $337
Customer reserves............................. $816 $1,187 --- $843 (3) $1,160
1996
Allowance for doubtful accounts............... $123 $42 --- $28 (1) $137
Product and service warranties................ $309 $160 --- $155 (2) $314
Customer reserves (4)......................... $648 $656 --- $488 (3) $816
1995
Allowance for doubtful accounts............... $118 $45 --- $40 (1) $123
Product and service warranties................ $283 $122 --- $96 (2) $309
Customer reserves (4)......................... $266 $944 --- $562 (3) $648

- ---------

(1) Uncollectible accounts written off
(2) Warranty claims paid
(3) Customer claims paid/reductions in reserves
(4) Amounts for prior years have been reclassified to conform to the 1997
presentation.

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors of Motorola, Inc.:

We consent to incorporation by reference in the registration statements on
Form S-8 (Nos. 333-03681, 333-03731 and 333-12817) and Form S-3 (Nos. 33-62911
and 333-11433) of Motorola, Inc. and subsidiaries of our reports dated January
12, 1998, relating to the consolidated balance sheets of Motorola, Inc. and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of earnings, stockholders' equity, and cash flows and related
financial statement schedule for each of the years in the three-year period
ended December 31, 1997, which reports appear in or are incorporated by
reference in the annual report on Form 10-K of Motorola, Inc. for the year ended
December 31, 1997.

/s/ KPMG Peat Marwick LLP

March 19, 1998
Chicago, Illinois

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Motorola, Inc. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

MOTOROLA, INC.

By: /s/ CHRISTOPHER B. GALVIN
--------------------------
Christopher B. Galvin
Chief Executive Officer

March 16, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Motorola,
Inc. and in the capacities and on the dates indicated.

Signature Title Date

/s/ CHRISTOPHER B. GALVIN Director and Principal Executive Officer 3/3/98
- ----------------------------------------------
Christopher B. Galvin

/s/ CARL F. KOENEMANN Principal Financial Officer 3/3/98
- -----------------------------------------------
Carl F. Koenemann

/s/ KENNETH J. JOHNSON Principal Accounting Officer 3/3/98
- -----------------------------------------------
Kenneth J. Johnson

/s/ RONNIE C. CHAN Director 3/2/98
- -----------------------------------------------
Ronnie C. Chan

/s/ H. LAURANCE FULLER Director 3/9/98
- -----------------------------------------------
H. Laurance Fuller

/s/ ROBERT W. GALVIN Director 3/2/98
- -----------------------------------------------
Robert W. Galvin

/s/ ROBERT L. GROWNEY Director 3/2/98
- -----------------------------------------------
Robert L. Growney

/s/ ANNE P. JONES Director 3/3/98
- -----------------------------------------------
Anne P. Jones

Signature Title Date

/s/ DONALD R. JONES Director 3/2/98
- ------------------------------------------------
Donald R. Jones

/s/ JUDY C. LEWENT Director 3/3/98
- ------------------------------------------------
Judy C. Lewent

/s/ WALTER E. MASSEY Director 3/8/98
- ------------------------------------------------
Dr. Walter E. Massey

/s/ JOHN F. MITCHELL Director 3/16/98
- ------------------------------------------------
John F. Mitchell

/s/ THOMAS J. MURRIN Director 3/1/98
- ------------------------------------------------
Thomas J. Murrin

/s/ NICHOLAS NEGROPONTE Director 3/5/98
- ------------------------------------------------
Nicholas Negroponte

/s/ JOHN E. PEPPER, JR. Director 3/2/98
- ------------------------------------------------
John E. Pepper, Jr.

/s/ SAMUEL C. SCOTT III Director 3/5/98
- ------------------------------------------------
Samuel C. Scott III

/s/ GARY L. TOOKER Director 3/2/98
- ------------------------------------------------
Gary L. Tooker

/s/ B. KENNETH WEST Director 3/4/98
- ------------------------------------------------
B. Kenneth West

/s/ JOHN A. WHITE Director 3/3/98
- ------------------------------------------------
John A. White

EXHIBIT INDEX

Exhibit No. Exhibit
- ----------- -------

1 Underwriting Agreement dated October 7, 1997 by and among
Motorola, Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated (incorporated by reference to Exhibit 1 to Motorola's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 27, 1997).

3(i) Restated Certificate of Incorporation of Motorola, Inc., as
amended, including Certificate of Designation, Preferences and
Rights for Junior Participating Preferred Stock, Series A
(incorporated by reference to Exhibit 3(i)(b) to Motorola's
Quarterly Report on Form 10-Q for the fiscal quarter ended April
2, 1994).

3(ii) By-Laws of Motorola, Inc., revised as of November 14, 1996
(incorporated by reference to Exhibit 3(ii) to Motorola's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996).

4.1 Rights Agreement dated November 9, 1988 (incorporated by reference
to Exhibit (1) to Motorola's Registration Statement on Form 8-A
dated November 15, 1988).

4.2 Amendment to Rights Agreement dated August 7, 1990 (incorporated
by reference to Exhibit 2 to Motorola's Form 8 dated August 9,
1990 amending Motorola's Registration Statement on Form 8-A dated
November 15, 1988).

4.3 Amendment No. 2 on Form 8 dated December 2, 1992 amending
Motorola's Registration Statement on Form 8-A dated November 15,
1988 (incorporated by reference to Motorola's Form 8 dated
December 2, 1992).

4.3(a) Amendment No. 3 on Form 8-A/A dated February 28, 1994 amending
Motorola's Registration Statement on Form 8-A dated November
15,1988 (incorporated by reference to Motorola's Amendment No. 3
on Form 8-A/A dated February 28, 1994).

4.4 LYONs Indenture dated September 1, 1989 (incorporated by reference
to Exhibit 4(a) to Motorola's Registration Statement on Form S-3,
Registration No. 33-30662).

4.5 Indenture dated as of March 15, 1985 between Motorola, Inc. and
Harris Trust and Savings Bank, as Trustee, and specimen of 8.40%
Debentures due August 15, 2031 under the Indenture (incorporated
by reference to Exhibits 4(C) and 4(B), respectively, to
Motorola's Current Report on Form 8-K dated August 12, 1991).

4.6 Indenture dated as of October 1, 1991 between Motorola, Inc. and
Harris Trust and Savings Bank, as Trustee (incorporated by
reference to Exhibit 4.5 to Motorola's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991).

4.7 Specimen of 7.60% Notes due January 1, 2007 (incorporated by
reference to Exhibit 4.6 to Motorola's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991).

4.8 Specimen of 6 1/2% Notes due March 1, 2008 (incorporated by
reference to Exhibit 4(B) to Motorola's Current Report on Form 8-K
dated March 1, 1993).

4.9 LYONs Indenture dated as of September 1, 1993 (incorporated by
reference to Exhibit 4(v) to Motorola's Quarterly Report on Form
10-Q for the quarter ended October 2, 1993).

Exhibit No. Exhibit
- ----------- -------

4.10 Indenture dated as of May 1, 1995 between Motorola, Inc. and
Harris Trust and Savings Bank, as Trustee (incorporated by
reference to Exhibit 4(d) to Motorola's Registration Statement on
Form S-3, Registration No. 33-56055).

4.11 Specimen of 7 1/2% Debentures due May 15, 2025 (incorporated by
reference to Exhibit 4(B) to Motorola's Current Report on Form 8-K
dated May 15, 1995).

4.12 Specimen of 6 1/2% Debentures due September 1, 2025 (incorporated
by reference to Exhibit 4.12 to Motorola's Annual Report on Form
10-K for the fiscal year ended December 31, 1995).

4.13 Specimen of 5.22% Debentures due October 1, 2097 (incorporated by
reference to Exhibit 4 to Motorola's Quarterly Report on Form 10-Q
for the fiscal quarter ended September 27, 1997).

10.1 Motorola Executive Incentive Plan, as amended through November 23,
1993, including the Long Range Incentive Program (incorporated by
reference to Exhibit 10.1 to Motorola's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993).

10.2 Motorola Long Range Incentive Plan of 1994 (incorporated by
reference to Exhibit 10.2 to Motorola's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993).

10.3 Share Option Plan of 1982, as amended through March 24, 1992
(incorporated by reference to Exhibit 10.3 to Motorola's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990,
Exhibit 10.2(a) to Motorola's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991 and Exhibit 10.3 to Motorola's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992).

10.4 Share Option Plan of 1991, as amended through August 7, 1995
(incorporated by reference to Exhibit 10.4 to Motorola's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993
and Exhibit 10.4 to Motorola's Report on Form 10-K for the fiscal
year ended December 31, 1995).

10.5 Resolutions Amending Sections 8 and 10(2) of the Share Option Plan
of 1982, and Resolutions Amending Sections 7 and 9(b) of the Share
Option Plan of 1991, effective August 15, 1996 (incorporated by
reference to Exhibit 10.5 to Motorola's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996).

10.6 Share Option Plan of 1996, as amended through May 7, 1997
(incorporated by reference to Exhibit 10 to Motorola's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 28, 1997).

10.7 Motorola Elected Officers Supplementary Retirement Plan, as
amended through February 6, 1995 (incorporated by reference to
Exhibit 10.5 to Motorola's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994).

10.8 Executive Health Plan (incorporated by reference to Exhibit 10.8
to Motorola's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996).

10.9 Accidental death and dismemberment insurance for MEIP participants
(incorporated by reference to Exhibit 10.7 to Motorola's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990).

10.10 Arrangement for directors' fees and retirement plan for non-
employee directors (description incorporated by reference from
pages 6 and 7 of Motorola's Proxy Statement for the 1997 annual
meeting of stockholders).

10.11 Deferred Fee Plan for Outside Directors, as amended February 6,
1996 (incorporated by reference to Exhibit 10.9 to Motorola's
Annual Report on Form 10-K for the fiscal year ended December 31,
1995).

Exhibit No. Exhibit
- ----------- -------

10.12 Motorola Non-Employee Directors Stock Plan, as amended August 15,
1996 (incorporated by reference to Exhibit 10.12 to Motorola's
Annual Report on Form 10-K for the fiscal year ended December 31,
1996).

10.13 Officers' Group Life Insurance Policy (incorporated by reference
to Exhibit 10.10 to Motorola's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990).

10.14 Consultant Agreement dated May 1, 1996 between Motorola, Inc. and
John F. Mitchell (incorporated by reference to Exhibit 99 to
Motorola's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1996).

10.15 Form of Termination Agreement in respect of a change in control
(incorporated by reference to Exhibit 10.15 to Motorola's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989).

10.16 Policy protecting salary and medical benefits of employees in the
event of an unsolicited change in control (incorporated by
reference to Exhibit 10.16 to Motorola's Annual Report on Form 10-
K for the fiscal year ended December 31, 1990).

10.17 Insurance policy covering non-employee Directors (incorporated by
reference to the description on page 6 of Motorola's Proxy
Statement for the 1997 annual meeting of stockholders and to
Exhibit 10.16 to Motorola's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989).

10.18 Iridium Space System Contract between Motorola, Inc. and Iridium,
Inc., as amended to date, and Iridium Communications Systems
Operations and Maintenance Contract between Motorola, Inc. and
Iridium, Inc., as amended to date (incorporated by reference to
Exhibits 99.2 and 99.3, respectively, to Motorola's Current Report
on Form 8-K dated August 2, 1993 and Exhibits 99(a) and 99(b),
respectively, to Motorola's Quarterly Report on Form 10-Q for the
quarter ended October 1, 1994).

11 Motorola, Inc. and Subsidiaries Basic and Diluted Earnings Per
Common Share.

21 Subsidiaries of Motorola.

23 Consent of KPMG Peat Marwick LLP. See page 22 of the Annual Report
on Form 10-K of which this Exhibit Index is a part.

27 Financial Data Schedule (filed only electronically with SEC).