UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

KATHERINE ACHESON, Individually and OnBehalf of All Others Similarly Situated,

CIVIL ACTION NO.Plaintiff,

vs.

MOTOROLA, INC., EDWARD J. ZANDER,RONALD G. GARRIQUES, DAVID W.DEVONSHIRE, GREGORY Q. BROWN,DANIEL M. MOLONEY, RICHARD N.NOTTENBURG, and PADMASREEWARRIOR,

Defendants.

CLASS ACTION COMPLAINT

JURY TRIAL DEMANDED

Plaintiff, Katherine Acheson ("Plaintiff'), alleges the following based upon the

investigation by Plaintiffs counsel, which included, among other things, a review of the

defendants' public documents, conference calls and announcements made by defendants, United

States Securities and Exchange Commission ("SEC") filings, wire and press releases published

by and regarding Motorola, Inc. ("Motorola" or the "Company"), securities analysts' reports and

advisories about the Company, and information readily available on the Internet, and Plaintiff

believes that substantial additional evidentiary support will exist for the allegations set forth

herein after a reasonable opportunity for discovery.

NATURE OF THE ACTION AND OVERVIEW

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1. This is a federal class action on behalf of purchasers of Motorola' s securities

between July 19, 2006 and January 4, 2007, inclusive (the "Class Period"), seeking to pursue

remedies under the Securities Exchange Act of 1934 (the "Exchange Act").

2. Motorola builds, markets and sells products, services and applications that make

connections to people, information and entertainment through broadband, embedded systems and

wireless networks. The Company provides wireless and broadband communication products

worldwide.

3. On October 17, 2006, the Company announced disappointing net income for the

third quarter 2006 which failed to meet its previously issued financial guidance . This was

primarily due to disappointing handset sales in Europe. Notwithstanding this news, the

Company stated that it expected the market to substantially grow in the following quarter, and

guided an 18% to 20% year-over-year forecast . As one Company executive admitted, it was "a

missed forecast, frankly, on our part and a shortfall. If we forecasted properly, we - you plan

accordingly. ... We think we have now forecasted for Q4 what we need to go do there, including

the dual-modes, and hopefully throughout 2007."

4. On this news, Motorola's shares fell $0.64 per share, or over 2.5 percent, to close

on October 17, 2006 at $24.85 per share, on unusually heavy trading volume. The following

day, Motorola's shares declined an additional $1.21 per share, or 4.8 percent, to close on October

18, 2006 at $23.64 per share, also on heavy trading volume.

5. Then on January 4, 2007, the Company shocked investors when it announced its

preliminary fourth quarter 2006 results, and again failed to meet its previously issued guidance.

The Company stated that the "shortfall in both sales and earnings occurred in the Mobile Devices

segment and is attributed to an unfavorable geographical and product-tier mix of sales as

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compared to the company's internal forecast." Despite this admittedly disappointing quarterly

financial performance, one Company executive affirmed that Motorola would nevertheless

"remain committed to the strategic direction." On news of this, the Company's shares fell an

additional $1.61 per share, or over 7.8 percent, to close on January 5, 2007 at $18.94 per share,

on unusually heavy trading volume.

6. The Complaint alleges that, throughout the Class Period, defendants failed to

disclose material adverse facts about the Company's financial well-being and prospects.

Specifically, defendants failed to disclose or indicate the following: (1) that the Company was

suffering from poor product and geographic mix in the Mobile Services segment; (2) that the

Company was suffering from reduced margins and pricing pressures as a result of shifting

consumer demand and purchases; (3) that the Company was unable to adequately offer 3G

products when consumer demand increased as the Company was not acquiring the necessary

chipsets from its suppliers; (4) that the Company's performance in Europe was suffering as a

result of its limited 3G product portfolio; (5) that the Company's products were not meeting

internal expectations or sales targets ; and (6) that, as a result of the foregoing, the Company's

statements about its financial well-being and future business prospects were lacking in a

reasonable basis when made.

7. As a result of defendants' wrongful acts and omissions, and the precipitous decline

in the market value of the Company's securities, Plaintiff and other Class Members have suffered

significant losses and damages.

JURISDICTION AND VENUE

8. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of

the Exchange Act, (15 U.S.C. §§ 78j(b) and 78t(a)), and Rule lOb-5 promulgated thereunder (17

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C.F.R. § 240.10b-5).

9. This Court has jurisdiction over the subject matter of this action pursuant to

Section 27 of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331.

10. Venue is proper in this Judicial District pursuant to Section 27 of the Exchange

Act, 15 U.S.C. § 78aa and 28 U.S.C. § 1391(b). Many of the acts and transactions alleged

herein, including the preparation and dissemination of materially false and misleading

information, occurred in substantial part in this Judicial District . Additionally, Motorola's

headquarters is located within this Judicial District.

11. In connection with the acts, conduct and other wrongs alleged in this Complaint,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,

including but not limited to, the United States mails, interstate telephone communications and

the facilities of the national securities exchange.

PARTIES

12. Plaintiff, Katherine Acheson, as set forth in the accompanying certification,

incorporated by reference herein, purchased Motorola's securities at artificially inflated prices

during the Class Period and has been damaged thereby.

13. Defendant Motorola is a Delaware corporation with its principal executive offices

located at 1303 East Algonquin Road, Schaumburg, Illinois.

14. Defendant Edward J. Zander ("Zander") was Motorola's Board Chairman and

Chief Executive Officer ("CEO") during the Class Period.

15. Defendant Ronald G. Garriques ("Garriques") was Motorola's Executive Vice

President and President of Mobile Devices during the Class Period.

16. Defendant David W. Devonshire ("Devonshire") was Motorola's Chief Financial

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Officer during the Class Period.

17. Defendant Gregory Q. Brown ("Brown") was Motorola's Executive Vice

President of Networks and Enterprise during the Class Period.

18. Defendant Daniel M. Moloney ("Moloney") was Motorola's Executive Vice

President and President of Connected Home Solutions during the Class Period.

19. Defendant Richard N. Nottenburg ("Nottenburg") was Motorola's Executive Vice

President and Chief Strategy Officer during the Class Period.

20. Defendant Padmasree Warrior ("Warrior") was Motorola's Executive Vice

President and Chief Technology Officer during the Class Period.

21. Defendants Zander, Garriques, Devonshire, Brown, Moloney, Nottenburg, and

Warrior are collectively referred to hereinafter as the "Individual Defendants." The Individual

Defendants, because of their positions with the Company, possessed the power and authority to

control the contents of Motorola' s reports to the SEC, press releases and presentations to

securities analysts, money and portfolio managers and institutional investors, i.e., the market.

Each defendant was provided with copies of the Company's reports and press releases alleged

herein to be misleading prior to, or shortly after, their issuance and had the ability and

opportunity to prevent their issuance or cause them to be corrected. Because of their positions

and access to material non-public information available to them, each of these defendants knew

that the adverse facts specified herein had not been disclosed to, and were being concealed from,

the public, and that the positive representations which were being made were then materially

false and misleading. The Individual Defendants are liable for the false statements pleaded

herein, as those statements were each "group-published" information, the result of the collective

actions of the Individual Defendants.

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SUBSTANTIVE ALLEGATIONS

Background

22. Motorola builds, markets and sells products, services and applications that make

connections to people, information and entertainment through broadband, embedded systems and

wireless networks . The Company provides wireless and broadband communication products

worldwide.

Materially False and MisleadingStatements Issued During the Class Period

23. The Class Period begins on July 19, 2006. On this day, the Company issued a

press release entitled "Motorola Announces Record Second-Quarter Sales and Earnings."

Therein, the Company, in relevant part, stated:

Second-Quarter Financial Hi2hli2hts

• Record quarterly sales of $10.88 billion, up 29 percentcompared to second-quarter 2005 sales of $8.41 billion

• Earnings of $.55 per share, versus earnings of $.37 pershare in the year-ago quarter

• Record handset shipments of 51.9 million units

• Global handset market share estimated at 22 percent, up4.3 percentage points versus the year-ago quarter

• Record digital entertainment set-top devices shipments of2.4 million

***

During the quarter, the company continued to maintain a verystrong balance sheet, generating operating cash flow fromcontinuing operations of approximately $500 million, its 22nd

consecutive quarter of positive operating cash flow. In addition,the company repurchased 39 million shares of its stock for $838million.

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"Motorola continues to deliver excellent quarterly sales andearnings growth. With our solid financial performance andunrelenting focus on innovation and customer satisfaction,Motorola is among the fastest growing large-cap technologycompanies in the world," said Ed Zander, chairman and CEO. "Inthe second quarter, all of our businesses improved sales and grewprofits sequentially versus the first quarter. Mobile Devices led theway, setting records for unit shipments, sales and profits. With ourstrong balance sheet, leading technologies and proven recordof growth, Motorola is well-positioned to continue creatingvalue for its shareholders."

***

Third Quarter 2006 Outlook

The company's outlook for the third quarter of 2006 is for sales ofbetween $10.9 billion and $11.1 billion, an increase of 20 to 23percent versus the prior-year quarter, driven primarily bycontinuing momentum in the Mobile Devices business. [Emphasisadded.]

24. Also on July 19, 2006, Motorola held an earnings conference call with investors

and financial analysts. During this call, the defendants, in relevant part, stated:

DAVE DEVONSHIRE: In terms of our third-quarter outlookfor 2006, we are looking for sales in the range of 10.9 billion to11.1 billion, which is up 20 to 23% versus the third quarter of2005, reflecting the continuum of momentum in our largestbusiness, Mobile Devices.

ED ZANDER: In 3G, we continue to grow with units up 55%quarter over quarter . And our iDEN business is as solid as ever.We had record for the second quarter and grew the businesssequentially . And we continue to innovate across technologies andprice tiers, 11 new handsets , and you can see many up here interms of GSM, CDMA and iDEN.

***

Additionally, we're seeing no let-up in iDEN and are rolling outnew and innovative products, including our super-rugged i580.Demand for iDEN continues to expand worldwide. In fact, thiswas a record second quarter for iDEN shipments.

***

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As far as our outlook goes, the second half of 2006 have [sic]traditional seasonality when compared to the first half of 2006 forthe industry; Mobile Devices to continue to keep delivering marketshare growth on a quarter-to-quarter basis and expanding operatingearnings percent on a year-to-year basis. We see good thing aheadfor the wireless segment. We expect the mobile device marketto grow by more than 15% for the full year 2006.

***

[ANALYST]: Just wonder if I can dig a little bit more into your3G outlook . Could you give us any color on maybe just WCDMA-only units and outlook for that technology in the back half of theyear for Motorola?

RON GARRIQUES: From an industry perspective, I think that Ihave been pretty consistent on this. I am more bearish than othersabout the growth of wideband CDMA in the second half of thisyear. I still think as an industry, we are really at the beginningstages of getting the real consumer-end benefit to get people really,really excited about devices. And I think in the second half of thisyear, especially in the European market, it will be a healthy mix ofGSM, GPRS, edge and wideband CDMA and HSDPA units.

I will take you through Motorola's UMTS and HSDPA roadmapfor the second half of this year. It is quite on track. It is quitecompelling. And I think that we will fare quite well on both UMTSand HSDPA devices in the second half of this year. [Emphasisadded.]

25. On September 6, 2006, the Company presented at Citigroup's Annual Global

Technology Conference. During this presentation, Defendant Zander, in relevant part, stated:

ED ZANDER: And we've been making some announcements.These happened at or before the analyst meeting, acquired a greatsmall company in Broadbus, it gives us switched digital video forthe Wireline market. Our relationship with Huawei around 3G -- I think is going to give us, not only a cost advantage but greattechnology, and we're teaming with them for a worldwide salesand marketing and services play for UMKS and Atris DPAtechnologies.

***

MODERATOR: ... Clearly, last quarter there was a lot of concernabout the momentum in the handset industry, industrywide. And as

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you look into the second half, particular given the fact that you'vehad an opportunity to talk to your customers, the service providers,what are you expecting in terms of the overall industry momentumin the second half? Do you think it'll be business as usual? Normalseasonality for the industry, not necessarily just for Motorola butfor the industry? Or do you see anything that potentially couldkeep you up at night?

ED ZANDER: Well, it won't keep me up at night.

***

MODERATOR: ... Clearly you have a pretty extensive portfolioof new products for the second half, particularly for the fourthquarter. Are you pretty confident in terms of your supply chainnow that you won't have connector --?

ED ZANDER: I don't know. You talk to them, I don't.

MODERATOR: I was just there in August, but -

ED ZANDER: What did you find out?

MODERATOR: Well, they seem to be ready for you guys. But, Iwant to hear it from your prospective. Are you getting the samething?

ED ZANDER: This guy is shipping this month actually. Not herein the U.S., but it's shipping, this is KRZR, I was told I could tellyou that. It's shipping in parts of the world as we speak, so, thismonth and it will be available in the U.S., I think both in CDMAand GSM. Riser's on schedule; the MOTOFONE will ship in Q4;the MAX and the XX will ship in Q4. So, I was told that all ourproducts are going to ship.

Now, be very careful. There's such demand for products likethis that we're going to have to allocate to certain geographiesand certain places. In Latin America, for example, the rockermusic area is selling like hotcakes, but we don't even offer it in theUnited States . So you've always got to look around to see someof the products and where they're selling. So, we won'tnecessarily be in every geography with every product, but wewill ship right now all of our products.

***

And the other thing I caution, I always do, is the suppliers. Wemove suppliers around ; based on quality, based on strategic fit,

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based on new designs, and we're shrinking the number ofsuppliers and sometimes -- it happened again this quarter --there was a leak out on some supplier and they were wrong.They admitted they were wrong, but it causes everybody to --just call us and we'll tell you what' s going on. I think we will.

***

Now, we have a 3G portfolio. We've got some great productscoming out the end of this year -- the MAX and the XX 3GRazors, and with the Huawei relationship, we're going to competevery aggressively on some of the 3G contracts going on there.[Emphasis added.]

26. On October 17, 2006, the Company issued a press release entitled "Motorola

Announces Record Third-Quarter Sales ." Therein, the Company, in relevant part, stated:

Third-Quarter Financial Hi2hli2hts

• Record quarterly sales of $10.6 billion, up 17 percent versusthe year-ago quarter

• GAAP earnings of $0.39 per share , including income of $0.10per share from discontinued operations and charges of $0.05per share from items highlighted below

• Record handset shipments of 53.7 million units, up 39 percentversus the year-ago quarter

• Global handset market share estimated at 22.4 percent, up 3.8percentage points versus the year-ago quarter

• Positive operating cash flow of $1.6 billion

***

During the quarter, the company continued to maintain a verystrong balance sheet, generating operating cash flow fromcontinuing operations of $1.6 billion, its 23rd consecutive quarterof positive operating cash flow. In addition, the companyrepurchased 62 million shares of its stock for $1.5 billion.

"While our third-quarter sales were slightly below ourguidance , we are pleased with our earnings . Each of ourbusiness segments and total Motorola improved operating marginversus the second quarter of 2006, excluding highlighted items.Mobile Devices again achieved record unit shipments and

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sequentially improved its market share versus the second quarter,"said Ed Zander, chairman and CEO. "During the quarter, GSMinfrastructure sales in the Europe, Middle East and Africaregion were weaker than anticipated due to customer delays incapital spending . Additionally, sales of iDEN mobile deviceswere lower, caused by customer inventory reductions inanticipation of new dual-mode device shipments in the fourthquarter. With our strong balance sheet, leadershiptechnologies and proven record of growth, Motorola is wellpositioned to continue creating value for its shareholders asone of the world's leading technology companies."

***

Fourth Quarter 2006 Outlook

The company's outlook for the fourth quarter of 2006 is for sales ofbetween $11.8 billion and $12.1 billion, an increase of 18 to 21percent versus the prior-year quarter. [Emphasis added.]

27. Also on October 17, 2006, the Company held an earnings conference call with

investors and financial analysts. During this call, the defendants, in relevant part, stated:

ED ZANDER: While I have many positive things to say about thequarter, I do want to take a moment and explain why our saleswere below the midpoint of our guidance range by about 3.5%.About half of our shortfall is due to lower-than-expected GSMinfrastructure sales in our EMEA -- or Europe, Middle Eastand Africa -- region . Primarily, customers delayed capitalspending, plain and simple.

The other half was due to lower sales of iDEN handsets causedby customer inventory adjustments, in anticipation of our newdual-mode phones which will ship this quarter. More aboutthat later.

***

We also announced today that we've hired Casey Keller as our newChief Marketing Officer. Casey is a seasoned marketing executive,with years of experience at such companies as Heinz and Procter &Gamble. We are really pleased to have Casey join us.

In summary, we had a solid quarter in profit and marketshare, but as a management team, we are not pleased with theslight revenue shortfall. Our Q4 guidance is once again goodrevenue growth year over year. We are innovating for the

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future around our core competencies, seamless mobilityproducts and services.

***

DAVE DEVONSHIRE: Now, moving on to our fourth-quarterguidance, our outlook for the fourth quarter is sales between $11.8billion and $12.1 billion, which is up in the 18% to 21% rangeversus the fourth quarter of 2005. In terms of our guidance, as yourecall, stock compensation expense is not in the prior year. It willbe in the fourth quarter, identified as a highlighted item, but it willbe about $0.02 per share.

***

ED ZANDER: Europe was a little bit of a challenge in thequarter, largely due to 3G. Having said that, RAZR continuesas the top seller in western Europe. To drive 3G momentum inQ4, we're launching, of course, our RAZRXX andRAZRMAXX, and I will talk about those in just a minute.Additionally, for the GSM EDGE networks, RIZR is preparing tojoin KRZR in Europe. We are back in Russia now. We opened ournew Red Square MOTO store in Moscow. It is our regional crownjewel, and we expect good things out of that this quarter andthroughout 2007.

***

As we look to the fourth quarter of 2006, we expect the marketto grow by greater than 15% for full year 2006. We expecttypical seasonality and strong demand for new products in thefourth quarter, and we expect Mobile Devices to continue tokeep growing market share on a sequential basis, and doingthis profitably by expanding OE on a year-over-year basis.

***

[ANALYST]: Ron, if I might, you don 't seem to have nearly thefocus on 3G devices as does, say, Nokia or Samsung. You havebeen bearish on it in the past. What do you need to see beforeyou get more bullish here? Is it going to be higher data ARPUs atthe carriers at greater 3G coverage? Are you looking for a stronguptick in 3G phone sales from others before you kind of plowinto it with both legs?

RON GARRIQUES: ... Ed. I think the predominant -- when youthink 3G, meaning specifically UMTS, for us, this quarter isabout a platform change. We took our previous platform,

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which we built kind of V3x on, and now have transitioned towhat we call [Argon LV] from Freescale.

With new products like XX and MAXX, I do believe thisplatform in this quarter gets us a very competitive set ofproducts out in the marketplace . I have been relatively bearishabout the size of the UMTS market in 2006. I think that's kind ofthe way it played out. I am more bullish on 2007. I'm also morebullish on our 2007 roadmap, consistent with that stronger market.

***

[ANALYST]: In your remarks, you said that part of the reasonthat you had some weakness this quarter is because Nextel iswaiting for dual-mode phone or was waiting, and it's nowbeing shipped . So the question is, when I look at your guidanceversus the consensus for next quarter, the consensus is at the highend of your guidance, which means your midpoint is belowconsensus. So if we are going into a seasonally strong quarter,and if it was just because of Nextel waiting to get the newphones, why don't we see stronger guidance?

ED ZANDER: Well, first of all, I'm not going to talk aboutspecific customers . We talked about iDEN, and we did have --as I said, that the sales weakness was two things , and that'swhat they were ; they were GSM in Europe and also the iDENinventory adjustments for anticipation of dual-mode.

As far as our forecast goes, we think it ' s a healthy, as Davesaid, 18% to 20% year-over-year forecast. It [takes into] a lot ofbusinesses that we have here, including infrastructure and otherthings. But in Ron's business, I think, with our new products wedid say we would grow earnings year over year and we wouldgrow market share year over year. So I just don 't want tocomment specifically on customers, other than to say we dothink this quarter is going to be, with all our new productsshipping, a good one for Mobile Devices.

RON GARRIQUES: One of the things I would add to Ed'scomment is, when we look at our backlog, which is basicallyour orders for Q4, our orders for this coming quarter are atthe highest level since Motorola has been in the Mobile Devicesbusiness.

***

[ANALYST]: The iDEN business has been very profitable forMotorola the last few years . But now that you have got a

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technology transition going on there, is it possible that the new

dual-mode iDEN handsets will bring higher pricing, at least

initially? Or are we looking more at a volume situation over the

near term?

RON GARRIQUES: I'll let Greg talk about the infrastructure sideof the house. But from an iDEN handset perspective, we look at --the big thing that drives basically higher ASPs on iDEN handsetsisn't necessarily the technology. It's the fact that we design millspec products that are different than any other handsets, whether itbe a CDMA, UMTS or other technologies that are out there. Thefact that it's now CDMA as well, and therefore it has a broadbandlength -- I believe that consumers will find that more valuable.

Having said that, and putting it to the side, if you look over the last8 to 12 quarters inside of this business, although our iDENcustomers are unbelievably important to us and we really docherish that business, it becomes a smaller percent of our overallbusiness every single quarter. At the exact same time , we're stillexpanding OE percent on a year-over-year basis.

GREG BROWN: On the infrastructure side, the only thing I wouldadd is that Q3 was a solid quarter on the iDEN infrastructure. Wewill probably have our second-best year on iDEN infrastructureout of the last four or five on an annualized basis. That's comingoff of last year, which was a record high. And iDEN continuallyhas a high level of interest and growth outside of the USinternationally. We referenced NII Holdings, but iDEN nowworldwide is up to about 27 million subscribers in, I think, 26different countries. So we see it has a very viable technology in avariety of different international theaters.

ED ZANDER: ... The iDEN was a missed forecast, frankly, onour part and a shortfall . If we forecasted properly, we -- youplan accordingly . So understand that. We think we have nowforecasted for Q4 what we need to go do there, including thedual-modes, and hopefully throughout 2007.

***

[ANALYST]: ... Ron, can you give us, perhaps , a regional reviewon your units performance in each region and how it actedsequentially? It seems that, if we neutralize the big impact you hadfrom India, you're kind of flattish overall quarter over quarter.

RON GARRIQUES : ... I think we struggled in the Europeanmarket on the eastern part of Europe. We struggled because of

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the stuff in getting Russia going again for us, which is a veryimportant market in Eastern Europe for us. I believe that isbehind us now, but that did give us a hiccup in Q3. Quitehonestly, in Q3, as Europe has become more of a UMTSmarket, our products really that meet those needs are kind ofQ4 products; they weren't Q3 products. I think we have towork through that.

***

[ANALYST] : I just wanted to follow up on the infrastructurequestion, a bit of clarification . I understand that the EMEA regionwas a bit weaker than you had expected. But I'm wondering if youhad anticipated that it would be up sequentially , as it has been thelast couple of years, and this year was just down as normalseasonality would imply. Or is there something a bit broader goingon there , with carriers readjusting their plans and reevaluating theirpriorities?

GREG BROWN: No, I think you hit it right on. I think that weexpected it to perform along more historical trends, either flator slightly sequentially up in EMEA, and it just didn'tmaterialize . So obviously, we had to readjust accordingly. Butthat' s really the primary driver . Again, I think that was largelydriven by the push-out of customer decisions, primarily, to Q4in 2007.

ED ZANDER: There was consolidation going on across the world.It doesn 't let us off the hook for not forecasting properly inthat particular area. So we have to take that one plus the iDENone, as in July when we gave you guidance , those two thingshad different forecast numbers on them. The [sic] didn'tmaterialize -- one for, we know now, with the dual-mode and theGSM, our checks in the last few weeks or months actually wasmostly due to moveouts, some of which you just said about, interms of consolidation and people reassessing their capital budgets.But nothing in terms of competition in the accounts we went afterand took a look at. [Emphasis added.]

28. On this news, shares of Motorola fell $0.64 per share, or over 2.5 percent, to close

on October 17, 2006 at $24.85 per share, on unusually heavy trading volume. The following

day, the Company' s shares declined an additional $ 1.21 per share, or 4.8 percent, to close on

October 18, 2006 at $23.64 per share, again on heavy trading volume.

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29. On October 18, 2006, The Wall Street Journal published an article entitled

"Motorola's Profit Declines 45%, Hurt by Weak Handset Sales ." Therein, the article, in relevant

part, stated:

Motorola Inc. reported a 45% decline in third-quarter profit amiddisappointing handset sales and weak orders of wireless equipmentoverseas.

***

Motorola blamed a slowdown in demand for handsets using iDENwireless technology, commonly found in Sprint Nextel Corp.'sNextel phones.

***

Ron Garriques, head of the company's mobile-handset division,said customers were holding off on purchases in anticipation ofdual-mode handsets that will work on both the Sprint and Nextelnetworks. He expects a rebound in the fourth quarter, when thosephones become available.

A longer-term concern is the equipment business in the Europe,Middle East and Asia regions. Wireless-service providers in thoseareas are holding off on spending on infrastructure related to thecurrent global system for mobile communications technology,because they are focusing on upgrading to next-generationtechnology.

***

Looking ahead, Motorola said it expects to generate revenue of$11.8 billion to $12.1 billion in the fourth quarter, compared withWall Street's forecast of $12.1 billion.

30. The statements contained in 1123 - 27 were materially false and misleading when

made because defendants failed to disclose or indicate the following: (1) that the Company was

suffering from poor product and geographic mix in the Mobile Services segment; (2) that the

Company was suffering from reduced margins and pricing pressures as a result of shifting

consumer demand and purchases; (3) that the Company was unable to adequately offer 3G

products when consumer demand increased as the Company was not acquiring the necessary

16

chipsets from its suppliers; (4) that the Company's performance in Europe was suffering as a

result of its limited 3G product portfolio; (5) that the Company's products were not meeting

internal expectations or sales targets ; and (6) that, as a result of the foregoing, the Company's

statements about its financial well-being and future business prospects were lacking in a

reasonable basis when made.

The Truth Begins to Emerge

31. On January 4, 2007, the Company issued a press release entitled "Motorola

Announces Preliminary Estimates of Fourth Quarter 2006 Results." Therein, the Company, in

relevant part, stated:

Motorola, Inc. (NYSE: MOT) today announced preliminaryestimates of fourth quarter 2006 financial results . Although thecompany has not finalized its financial results for the fourthquarter , sales are now estimated to be in the range of $11.6 to$11.8 billion, versus the guidance given on October 17, 2006, of$11.8 to $12 . 1 billion . Fourth-quarter GAAP earnings per share arenow estimated to be in the range of $0 . 13 to $0 . 16, which is belowthe company's internal forecast at the start of the fourth quarter.The estimated earnings per share range includes estimated netcharges , primarily non-cash, of approximately $0.10 per sharerelating to items that are typically highlighted in the company'searnings press releases, including investment -related losses, stockcompensation expenses , business reorganization charges andunusual tax expenses . The fourth quarter will represent Motorola's24th consecutive quarter of positive operating cash flow.

The shortfall in both sales and earnings occurred in the MobileDevices segment and is attributed to an unfavorablegeographical and product-tier mix of sales as compared to thecompany's internal forecast. In the fourth quarter, MobileDevices unit sales were approximately 66 million units, up 23percent from the third quarter of 2006 and up 48 percent fromthe fourth quarter of 2005.

***

"We are very disappointed with our fourth-quarter financialperformance," said Ed Zander, chairman and CEO, "but weremain committed to the strategic direction and long-term

17

financial targets we discussed at our annual analysts meetingin July 2006. We will discuss plans to improve operatingprofitability on January 19 when we announce fourth-quarterearnings." [Emphasis added.]

32. On this news, Motorola's shares fell $1.61 per share, or over 7.8 percent, to close

on January 5, 2007 at $18.94 per share, on unusually heavy trading volume. Following the

Company's news, on January 5, 2007, the Company was downgraded by Deutsche Bank, Piper

Jaffray, Merrill Lynch, CIBC, Bear Stearns , Oppenheimer, UBS, A.G. Edwards , and Needham &

Company.

POST CLASS PERIOD DEVELOPMENTS

33. On January 19, 2007, Motorola held an earnings conference call with investors

and financial analysts. During this call, the defendants, in relevant part, stated:

ED ZANDER: As we said in our January 4th earnings pre-announcement, our mobile device segment was challenged by ageographical end product tier mix ....

Add to this some difficulties in capitalizing on the growth of theUMTS market and softness in the U.S. iDEN market and you havethe earnings shortfall in this division.

***

However, we did miss our Q4 profit target. As I said earlier, onthis slide it's pretty straightforward. We had some forecasts,some pricing assumptions in our GSM and EDGE business.We moved RAZR into a much more powerful position in termsof taking advantage of market share around the world andsome of the newer products just didn' t deliver in the mixed inforecasted geographies that we thought. We'll share more ofthat, as I said, later.

In addition, our 3G products began to ship actually in theDecember time frame, so we did not get the benefit of some of theincreases in 3G markets especially here in the U.S. and in Europe.And the iDEN business continues to remain challenged in theUnited States. And if you add all three of those up, with [sic] was anumber like $66 million you get some of these wrong and you doget some of the impacts we had.

18

***

There is, as you can see , from even some of our competitors thatannounced this week an opportunity for margin, an opportunity forprofit, especially with 3G and rich experiences. We just need toget our product line better in this area and withoutpreannouncing anything I think we've got some products inthis space.

Maybe I'll let Ron maybe also add to it while Ron is here.

RON GARRIQUES: Sure. We're going to spend a little bit of timeat 10:00 on this, but both the rich experiences and the UMTSdevices, I think from an XX and a MAX experience we began toramp those up. The place where we got a full ramp was theJapanese market where the RAZR XX is flying off the shelves.And as you see, the 10:00 presentation today will bring the UMTSportfolio all the way for enterprise through rich experiences,through feature phones and you'll see us bring out some what Ibelieve to be very compelling both camera products and musicproducts as well.

Now as we go do that, it's a very, very big market. And we dohave to ramp these products up. At the exact same time we have toramp some of the legacy products down. That transition doesn'thappen in just one quarter and we'll be doing that through Q1 andthrough Q2.

***

[ANALYST]: Ron, can you give us a little bit more color on ageographic standpoint? Clearly you've had a very strong quarterfrom units, but if you can break it down a little bit more by region,where do you think you did very well in share gains and where doyou think you might have lost a little bit?

RON GARRIQUES: Sure. I think Ed stated in the geographicmobile devices Europe was a very strong market for us, picking upseveral points of market share. And that was really a consciousdecision for us. We had been stagnant for almost a year from amarketshare perspective in the European market. And nowwith new - with the UMTS portfolio coming in it was time toreally double down on our footprint there.

***

ED ZANDER: The area we are missing, and up until justDecember, is a very strong 3G lineup, especially here in the

19

United States with one carrier that' s moved there and inEurope. And I do believe also in the higher end multimedia richexperiences, people that want the multimegapixel cameras and themusic experiences which are selling outside the United States.Those two areas I'd have to say we have to do a better job on.But we are going to attack expense structure and we are goingto attack new products in those two areas.

RON GARRIQUES: ... When I think about returning toprofitability in this business , the bulk of it is getting gross marginup higher as we do UMTS and rich experience devices.

***

This is not a market issue. This is our ability to bring really,really rich experiences with a great cost structure inside ofUMTS. And I believe the team has been working on that platformfor well over a year now and you'll see that not only at the end ofQ4 through Q1, getting better into Q2 and solid performance in thesecond half of `07.

***

ED ZANDER: I don ' t want to complicate this quarter. It'ssimple what happened. We made some pricing assumptions onKRZRs and RIZRs and some of the EDGE products thatdidn' t materialize , the spread between some of these productsand the RAZR product. And then on the other side, where the3G products were, just - our forecast just wasn ' t correct inassuming some of these things. It's not rocket science to see onour forecast what happened.

We've been this year [sic] getting through this year without astrong 3G portfolio. I think in Q4 - not only 3G, but I think 3Ggives you the ability to build rich experiences. Remember, ifyou're going to do music and video and TV and photos over theair, and again, you can't live in the United States to see this - a lotof it is in Europe, Japan, Korea, and other places - you need afaster network and a faster product to do some of these things.

We've been actually - we haven ' t been there with some ofthese products . We have music, but some of the other richexperience we didn't. I think what Ron's saying is with some ofthe 3G products we've launched, some of the newer product in thefirst and second quarter plus some of these cool experiences, Ithink we can get back into where I think a large portion of theprofit pool is. [Emphasis added.]

20

34. Also on January 19, 2007, Motorola held a second conference call with investors

and financial analysts. During this call, the defendants, in relevant part, stated:

ED ZANDER: And finally , the big transformation of course isNetworks and Enterprise , which several years ago, was reallyunder a lot of pressure because most of the revenue in thatspace was GSM, CDMA, iDEN, and whatever 3G we could get.We were not in a strong position in a lot of those areas.

***

GREG BROWN: But in carrier networks, specifically in 3G,Motorola had historically on the infrastructure side really notexecuted and had a bit of a gap.

***

RON GARRIQUES: So Ed talked a little bit about Q4 andabout the fact that we shipped all of our products on time.That is not 100% accurate . My wife and I were expecting to haveour third child on December 30th. He actually came out on January8. Okay? Nine pounds, third child, a pretty complicated birthprocess . Just to give you the idea of the pressure inside ofMotorola to get operating earnings [up] and I quote " it's theCarina, congratulations . The first rich experience, third-generation high margin device Ron has delivered all year."

***

From a feature phone perspective, Ed talked about bringing out ourfirst slider device. But, guys, we weren't the first slider out there inthe marketplace. Somebody else held onto that slider 2G business.We have to muscle our way onto those shelves out there in themarketplace. We have to go do that in 2G and here is our 3G sliderdevices coming out in Q1. Big display, really nice device. But wealso don't have 3G sliders out there in the market. Somebody elseis there.

***

On the other side is go to a Cingular store. We are not sittingon their shelves. We have to muscle our way back in, right. Welet that customer down without being able to support theirproduct roadmap . We have got to get back in there in the firsthalf of the year and show that customer that we have the skill setand the desire to delight them.

21

***

[UNIDENTIFIED AUDIENCE MEMBER: ... GSM EDGEvolumes didn't perhaps meet your needs particularly like perhapswith KRZR. What are you doing to perhaps amplify or expand onyour UMTS product line? How many UMTS products do you planto launch in the front half of the year? What price points do yousee these UMTS products coming in? Do YOU see an accelerationperhaps in the adoption of other suppliers' 3G-based bands to bringthe cost down? Do you see that helping you so that you can getmore products out and lower price points on UMTS so you can getyour margins back up?

RON GARRIQUES: ... So pretty full line of both UMTS andHFCPA devices either launched in Q4 in Q1 or in the Scalpel casekind of in the Q2 period. But I feel pretty good about that. From anadditional supplier from a silicon perspective, clearly what we'reshipping on today is the Freescale-type devices and we are stillshipping on the P2K or synergy software the ability to go fromP2K to the next-generation software with significant costreduction. You can't just swap out a base band overnight. We diddo the QUALCOMM announcement about another base bandsupplier inside of our portfolio. We will do further announcementof what products based on that base band solution will be out intothe marketplace. It will be an additional cost reduction to some ofthe stuff that we're doing today.

But a significant focus for us getting our fair share of the UMTSmarket, we still don' t see the huge rise up from the UMTSvolumes until second half of 2007 from the replacement marketperspective . [Emphasis added.]

35. On January 22, 2007, Business Week Online published an article entitled " Shifting

Gears at Motorola." The article, in relevant part, stated:

Less than a year ago, Motorola Chief Executive Ed Zander coulddo no wrong. His company was sizzling with the success of itsiconic, ultraslim RAZR phone. During the second quarter, endingin June, the world's No. 2 mobile-phone maker posted a 53% jumpin handsets shipped, nearly twice the growth posted by its biggerrival Nokia). Motorola's sales and profit soared as well.

Since then, growth has cooled more than the winter air off LakeMichigan in Motorola's Chicago backyard. After an early warningof a shortfall in profitability (see BusinessWeek.com, 1/5/07,"Wall Street Hangs Up on Motorola"), Motorola on Jan. 19

22

reported that while fourth-quarter revenue was up to $11.8 billion,net profit tumbled 48%, to $624 million from $1 .2 billion . "We didnot forecast properly," Zander told analysts in a conference call."You can get off a little bit on this thing, and it can get away fromyou pretty quickly."

Dropping the KRZR

A lot of things got away from Motorola. The company wasblindsided by pricing pressure on low-end products in emergingmarkets such as Latin America and on high-end products inEurope . In addition, Motorola didn't release enough phones withrich multimedia features that take advantage of the most advanced,or third-generation, wireless networks.

Cingular Wireless, which is owned by AT&T and is beingrenamed after its parent, had exclusive rights to the RAZR when itdebuted, but didn't offer the offshoot, the KRZR, late last year.Motorola did not make the KRZR in a 3G version for use on theGlobal System for Mobile communications used by Cingular andmost big European carriers . That means the KRZR doesn't handleservices tailored for these carriers ' fastest networks.

And even though it's not a 3G device, the KRZR is priced like ahigh-end phone. So it competes with phones offering far morerobust features, including better cameras, more storage, and richere-mail capabilities. Making matters worse, explained Motorola'smobile-phone chief Ron Garriques, makers of 3G productsratcheted down prices, putting pressure on slightly lower-tierphones like the KRZR.

***

To their credit, Motorola's executives aren't dodging blame.Garriques told analysts that after his wife gave birth on Jan. 8,Zander sent him a card saying, among other things, "This is thefirst rich experience, next-generation device Ron delivered allyear."

36. On March 1, 2007, the Company presented at the Goldman Sachs Technology

Investment Symposium. During this presentation, Defendant Zander, in relevant part, stated:

ED ZANDER: We've kind of taken down completely our 3GUMTS business, which we had no market position or revenue,and did a deal with Hauwei and that's working in the areas wewant it to work and we've thrown all of our resources

23

incrementally into next generation broadband wireless WiMAX,wi4, whatever you want to call it, both with acquisitions andinternal and that's just going great.

***

We just didn't get it done in Q4. I can talk about that if youwant. A lot of the Q4 misses were really manifested itself [sic]when you really go back into Ql, Q2 of 2006 and some of thedecisions that were made about 3G versus non-3G and aboutmoving up pricing in certain bands and just bad guesses, badmisses, bad things that we did that we've got to go fix, so that's- excuse me.

Mobile devices are all about execution . We've just got to getour product portfolio straightened out. We've got to getplatforms LINUX/JAVA done and implemented. We've got acouple of products that are now coming out with LINUX/JAVA.Really excited about that, but that gives us that LINUX/JAVA theability to ad to multimedia and the kind of software APIs ourpeople can write applications to. We need a more robust 3Gproduct line. We need to get cost at the very, very low endaddressed. We've got great product down there. Motofone wonGSM Product of the Year at the low end, but those products needto deliver the profitability we need and then we need to continuewith our rich experience products that I talked about.

***

Well this is it. You've got to come out with a product like thisor products like this or stay tuned hopefully this year that arethe wow products for 3G. We had them. We were the first in3G. We just totally messed that up with our designs andlateness and with our semiconductor partners and got behindthe 3G curve.... I mean I think we have the brand and the wowand the iconic still in the things we do, but if you're selling 3Gin Europe and you go to the store and that's what's beingsubsidized and pushed by Motofones and T-Mobiles andMotorola doesn't have any in that space and we only have acouple then you're gong to pay the price we paid in Q4. Samething in Cingular in the United States.

***

I mean Q4 to me was the inability to execute and have on theshelves at Cingular and Europe the kind of 3G products thatthey require. I mean you can just add the numbers up times

24

the revenue times the ASPs times the profits . A lot of Q4 wouldhave been right there. [Emphasis added.]

37. On March 21, 2007, Motorola held a conference call with investors and financial

analysts. During this call, the defendants, in relevant part, stated:

ED ZANDER: Further, our performance in Europe continuesto be below expectations because we had a limited 3G productportfolio . As a result and as you can see in today's press release,Q1 for Mobile Devices will be very difficult and disappointing.We also anticipate that Q2 will be difficult.

***

The 3G products moved in, especially in Europe and even inplaces here in the U.S, So at the "high end," we need to get our3G portfolio and we are starting to ship some products.

***

GREG BROWN: ... our performance in Europe continues tobe below expectations , and as has already been referenced, it'sprimarily because we have a limited 3G product portfolio atthis point in time.

***

ED ZANDER: I think you said and some of the other fellows onthe phone about the high end is much more of a featurecompetitive . UMTS in Europe , especially, which is a - as we'vealways said a big source of the profit pools . It's beginning tohappen here in the U.S. And there we just need more products.We've got some out, but you need a lot of products and a lot ofgeographies with a lot of the carriers and the branded services, andI think it ' s what we did with the mid tier - or at that time, theentire family of iconic products that we introduced, we did a hellof a job in 2004 and 2005 . We just got to recreate that again. Andthen in the low end we just got to pick our spots and go aftermarket share where we can make money. [Emphasis added.]

38. On April 18, 2007, Motorola held a conference call with investors and financial

analysts. During this call, Defendant Zander, in relevant part, stated:

ED ZANDER: ... One of the problems over there has been wejust haven't moved with a sense of urgency and priorities. Ithink the lack of focus on the realities of 3G, while they were

25

known were not executed, and that is the reason we made someof the changes over there.

***

If you look at the profit pools of the world in this business, weknow where they are. And Europe represents a profit pool, andit is 3G, and of that 3G, there is some part of that that is thesericher experiences. We need to be there.

In [the United States] we're doing quite well, but still you can hear- you can take some of the GSM customers. They are moving to3G and subsidizing 3G heavily into their networks. A lot of 3Goperators now need to get 3G products in. Even if the user does notexperience 3G, it is about the network efficiency and what they dowith their 3G networks. That is where the subsidies are going, andin some cases you will find even GSM products not beingsubsidized at that level, which puts it at a disadvantage into themarket.

So that is an area of profit pool that we just got to get at, and it isgoing to be some in Q2, a little better in Q3, even better than thatin Q4, and then, of course, when we get the things we talked aboutwith [LJ] and some of the silicon in 2008 a whole lot better. Andthe other area we have got to do, which is internal execution, iswhen we're going to announce low-end products like the new W-series, we've got to make money on them. And we've got to pickour spots to go after, which will also help too.

***

We introduced new 3G versions. If you run down to a Cingularstore, it's a great product, a hot product. We just introduced a good3G one, a new chrome one. We have them in Europe now, and Ithink you will see more in the second half of this year off of theRAZR family and, of course, the new 3G KRZR, which right nowis only in Europe. So those all help. And what we need to do is getmore of those out there because again, when you're dealing -whether it is 45 million or whatever the number is - 200 millionunits, you need to get more of those units at those higher profitswith higher ASPs. [Emphasis added.]

PLAINTIFF'S CLASS ACTION ALLEGATIONS

39. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased t

26

Motorola's securities between July 19, 2006 and January 4, 2007, inclusive (the "Class Period")

and who were damaged thereby. Excluded from the Class are defendants, the officers and

directors of the Company, at all relevant times, members of their immediate families and their

legal representatives , heirs , successors or assigns and any entity in which defendants have or had

a controlling interest.

40. The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, Motorola's securities were actively traded on the

New York Stock Exchange ("NYSE"). While the exact number of Class members is unknown to

Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff believes

that there are hundreds or thousands of members in the proposed Class. Record owners and

other members of the Class may be identified from records maintained by Motorola or its

transfer agent and may be notified of the pendency of this action by mail, using the form of

notice similar to that customarily used in securities class actions.

41. Plaintiff s claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by defendants' wrongful conduct in violation of

federal law that is complained of herein.

42. Plaintiff will fairly and adequately protect the interests of the members of the

Class and has retained counsel competent and experienced in class and securities litigation.

43. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by defendants' acts as

alleged herein;

27

(b) whether statements made by defendants to the investing public during the

Class Period misrepresented material facts about the business, operations

and management of Motorola; and

(c) to what extent the members of the Class have sustained damages and the

proper measure of damages.

44. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this action as

a class action.

UNDISCLOSED ADVERSE FACTS

45. The market for Motorola's securities was open, well-developed and efficient at all

relevant times. As a result of these materially false and misleading statements and failures to

disclose, Motorola's securities traded at artificially inflated prices during the Class Period.

Plaintiff and other members of the Class purchased or otherwise acquired Motorola's securities

relying upon the integrity of the market price of Motorola's securities and market information

relating to Motorola, and have been damaged thereby.

46. During the Class Period, defendants materially misled the investing public,

thereby inflating the price of Motorola's securities , by publicly issuing false and misleading

statements and omitting to disclose material facts necessary to make defendants' statements, as

set forth herein, not false and misleading. Said statements and omissions were materially false

and misleading in that they failed to disclose material adverse information and misrepresented

28

the truth about the Company, its business and operations , as alleged herein.

47. At all relevant times , the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, defendants made or caused to be made a series of materially false or misleading

statements about Motorola's financial well-being and prospects. These material misstatements

and omissions had the cause and effect of creating in the market an unrealistically positive

assessment of Motorola and its financial well-being and prospects, thus causing the Company's

securities to be overvalued and artificially inflated at all relevant times. Defendants' materially

false and misleading statements during the Class Period resulted in Plaintiff and other members

of the Class purchasing the Company's securities at artificially inflated prices , thus causing the

damages complained of herein.

LOSS CAUSATION

48. Defendants' wrongful conduct, as alleged herein, directly and proximately caused

the economic loss suffered by Plaintiff and the Class.

49. During the Class Period, Plaintiff and the Class purchased Motorola's securities at

artificially inflated prices and were damaged thereby. The price of Motorola's securities

significantly declined when the misrepresentations made to the market, and/or the information

alleged herein to have been concealed from the market, and/or the effects thereof, were revealed,

causing investors' losses.

SCIENTER ALLEGATIONS

50. As alleged herein, defendants acted with scienter in that defendants knew that the

public documents and statements issued or disseminated in the name of the Company were

29

materially false and misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced

in the issuance or dissemination of such statements or documents as primary violations of the

federal securities laws. As set forth elsewhere herein in detail, defendants, by virtue of their

receipt of information reflecting the true facts regarding Motorola, their control over, and/or

receipt and/or modification of Motorola's allegedly materially misleading misstatements and/or

their associations with the Company which made them privy to confidential proprietary

information concerning Motorola, participated in the fraudulent scheme alleged herein.

51. Additionally, during the Class Period, and with the Company's securities trading

at artificially inflated prices, Company insiders sold 1,207,187 shares of the Company's stock for

gross proceeds of $27,232,417, including over $26.7 million dollars received by the Individual

Defendants. This trading by Company insiders is evidenced by the following chart:

Date of Trade Inside Trader Number of

Shares

Price per

Share

Gross

Proceeds

October 23, 2006 GARRIQUES, RONALD 56,998 $23.60 - $23.67 $1,347,000

October 23, 2006 BROWN, GREGORY Q. 17,937 $23.25 - $23.26 $417,000

October 20, 2006 MOLONEY, DANIEL M. 101,468 $23.40 - $23.46 $2,377,000

October 20, 2006 BROWN, GREGORY Q. 92,640 $23.26 - $23.36 $2,159,000

August 14, 2006 STROBEL, STEVEN J. 20,000 $22.98 - $22.99 $460,000

August 9, 2006 GARRIQUES, RONALD 9,863 $22.81 $224,975

August 9, 2006 GARRIQUES, RONALD 187,781 $23.12 - $23.15 $4,344,000

July 27, 2006 NOTTENBURG, RICHARD N. 95,369 $22.09 - $22.13 $2,109,000

July 27, 2006 BROWN, GREGORY Q. 97,790 $22.08 - $22.12 $2,161,000

July 27, 2006 MOLONEY, DANIEL M. 75,000 $22.08 - $22.12 $1,658,000

July 27, 2006 DEVONSHIRE, DAVID W. 225,730 $22.08 - $22.13 $4,990,000

July 26, 2006 WARRIOR, PADMASREE 226,611 $22.00 $4,985,442

30

TOTALS: 1,207,187 $27,232,417

Shares Gross Proceeds

Applicability of Presumption of Reliance:Fraud On The Market Doctrine

52. At all relevant times, the market for Motorola' s securities was an efficient market

for the following reasons , among others:

(a) Motorola' s securities met the requirements for listing, and was listed and

actively traded on the NYSE, a highly efficient and automated market;

(b) As a regulated issuer, Motorola filed periodic public reports with the SEC

and the NYSE;

(c) Motorola regularly communicated with public investors via established

market communication mechanisms, including through regular

disseminations of press releases on the national circuits of major newswire

services and through other wide-ranging public disclosures, such as

communications with the financial press and other similar reporting

services; and

(d) Motorola was followed by several securities analysts employed by major

brokerage firms who wrote reports which were distributed to the sales

force and certain customers of their respective brokerage firms. Each of

these reports was publicly available and entered the public marketplace.

53. As a result of the foregoing, the market for Motorola' s securities promptly

digested current information regarding Motorola from all publicly-available sources and

reflected such information in the price of Motorola's securities. Under these circumstances, all

purchasers of Motorola' s securities during the Class Period suffered similar injury through their

31

purchase of Motorola' s securities at artificially inflated prices and a presumption of reliance

applies.

NO SAFE HARBOR

54. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

Many of the specific statements pleaded herein were not identified as "forward-looking

statements" when made. To the extent there were any forward-looking statements, there were no

meaningful cautionary statements identifying important factors that could cause actual results to

differ materially from those in the purportedly forward-looking statements . Alternatively, to the

extent that the statutory safe harbor does apply to any forward-looking statements pleaded

herein, defendants are liable for those false forward-looking statements because at the time each

of those forward-looking statements was made, the particular speaker knew that the particular

forward-looking statement was false , and/or the forward-looking statement was authorized

and/or approved by an executive officer of Motorola who knew that those statements were false

when made.

FIRST CLAIMViolation of Section 10(b) of

The Exchange Act and Rule 10b-5Promulgated Thereunder Against All Defendants

55. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

56. During the Class Period, defendants carried out a plan, scheme and course of

conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing

public, including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and

other members of the Class to purchase Motorola's securities at artificially inflated prices. In

32

furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them,

took the actions set forth herein.

57. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements not misleading; and (iii) engaged in acts, practices, and a course of business which

operated as a fraud and deceit upon the purchasers of the Company' s securities in an effort to

maintain artificially high market prices for Motorola's securities in violation of Section 10(b) of

the Exchange Act and Rule lOb-5. All defendants are sued either as primary participants in the

wrongful and illegal conduct charged herein or as controlling persons as alleged below.

58. Defendants, individually and in concert, directly and indirectly, by the use, means

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about Motorola's financial

well-being, business relationships, and prospects, as specified herein.

59. These defendants employed devices, schemes and artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a

course of conduct as alleged herein in an effort to assure investors of Motorola's value and

performance and continued substantial growth, which included the making of, or the

participation in the making of, untrue statements of material facts and omitting to state material

facts necessary in order to make the statements made about Motorola and its business operations

and future prospects in light of the circumstances under which they were made, not misleading,

as set forth more particularly herein, and engaged in transactions, practices and a course of

business which operated as a fraud and deceit upon the purchasers of Motorola's securities

during the Class Period.

33

60. Each of the Individual Defendants' primary liability, and controlling person

liability, arises from the following facts: (i) the Individual Defendants were high-level executives

and/or directors at the Company during the Class Period and members of the Company's

management team or had control thereof; (ii) each of these defendants, by virtue of his

responsibilities and activities as a senior officer and/or director of the Company was privy to and

participated in the creation, development and reporting of the Company's internal budgets, plans,

projections and/or reports; (iii) each of these defendants enjoyed significant personal contact and

familiarity with the other defendants and was advised of, and had access to , other members of the

Company's management team, internal reports and other data and information about the

Company's finances, operations, and sales at all relevant times; and (iv) each of these defendants

was aware of the Company's dissemination of information to the investing public which they

knew or recklessly disregarded was materially false and misleading.

61. The defendants had actual knowledge of the misrepresentations and omissions of

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

ascertain and to disclose such facts, even though such facts were available to them. Such

defendants' material misrepresentations and/or omissions were done knowingly or recklessly and

for the purpose and effect of concealing Motorola's financial well-being, business relationships,

and prospects from the investing public and supporting the artificially inflated price of its

securities . As demonstrated by defendants' overstatements and misstatements of the Company's

financial well-being and prospects throughout the Class Period, defendants, if they did not have

actual knowledge of the misrepresentations and omissions alleged, were reckless in failing to

obtain such knowledge by deliberately refraining from taking those steps necessary to discover

whether those statements were false or misleading.

34

62. As a result of the dissemination of the materially false and misleading information

and failure to disclose material facts, as set forth above, the market price of Motorola's securities

was artificially inflated during the Class Period. In ignorance of the fact that market prices of

Motorola's securities were artificially inflated, and relying directly or indirectly on the false and

misleading statements made by defendants, or upon the integrity of the market in which the

securities trade, and/or in the absence of material adverse information that was known to or

recklessly disregarded by defendants, but not disclosed in public statements by defendants during

the Class Period, Plaintiff and the other members of the Class acquired Motorola's securities

during the Class Period at artificially high prices and were damaged thereby.

63. At the time of said misrepresentations and omissions , Plaintiff and other members

of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the

other members of the Class and the marketplace known the truth regarding the problems that

Motorola was experiencing , which were not disclosed by defendants, Plaintiff and other

members of the Class would not have purchased or otherwise acquired their Motorola securities,

or, if they had acquired such securities during the Class Period, they would not have done so at

the artificially inflated prices which they paid.

64. By virtue of the foregoing, defendants have violated Section 10(b) of the

Exchange Act and Rule I Ob-5 promulgated thereunder.

65. As a direct and proximate result of defendants' wrongful conduct, Plaintiff and the

other members of the Class suffered damages in connection with their respective purchases and

sales of the Company's securities during the Class Period.

SECOND CLAIMViolation of Section 20(a) of

The Exchange Act Against the Individual Defendants

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66. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

67. The Individual Defendants acted as controlling persons of Motorola within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, and their ownership and contractual rights, participation in and/or awareness of the

Company's operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had

the power to influence and control and did influence and control, directly or indirectly, the

decision-making of the Company, including the content and dissemination of the various

statements which Plaintiff contends are false and misleading. The Individual Defendants were

provided with or had unlimited access to copies of the Company's reports, press releases , public

filings and other statements alleged by Plaintiff to be misleading prior to and/or shortly after

these statements were issued and had the ability to prevent the issuance of the statements or

cause the statements to be corrected.

68. In particular, each of these defendants had direct and supervisory involvement in

the day-to-day operations of the Company and, therefore, is presumed to have had the power to

control or influence the particular transactions giving rise to the securities violations as alleged

herein, and exercised the same.

69. As set forth above, Motorola and the Individual Defendants each violated Section

10(b) and Rule I Ob-5 by their acts and omissions as alleged in this Complaint. By virtue of their

positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of

the Exchange Act. As a direct and proximate result of defendants ' wrongful conduct, Plaintiff

and other members of the Class suffered damages in connection with their purchases of the

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Company's securities during the Class Period.

WHEREFORE, Plaintiff prays for relief and judgment, as follows:

(a) Determining that this action is a proper class action under Rule 23 of the

Federal Rules of Civil Procedure;

(b) Awarding compensatory damages in favor of Plaintiff and the other Class

members against all defendants, jointly and severally, for all damages

sustained as a result of defendants' wrongdoing, in an amount to be proven

at trial, including interest thereon;

(c) Awarding Plaintiff and the Class their reasonable costs and expenses

incurred in this action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

Dated:

By:

Respectfully submitted,

SCHIFFRIN BARROWAYTOPAZ & KESSLER, LLPRichard A. ManiskasD. Seamus Kaskela280 King of Prussia Rd.Radnor, PA 19087(610) 667-7706(610) 667-7056 (fax)

Attorneys for Plaintiff

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