Motorola was born as a company in 1928, and some of its past chip contributions include the 68000 processor, which was used in many computers in the 1970s and 1980s. But the semiconductor division was spun off, first to On Semiconductor in 1999 and then to Freescale Semiconductor in 2004. Motorola Mobility, which was spun off from the original Motorola, ultimately was sold to Google last year for $12.5 billion.
Motorola may have split many years ago, but Mobility still has a lot of semiconductor expertise and is in a good position to design new chips, McCarron said.
The company already has plenty of DSP expertise, and the next logical step would be to design its own CPU, McCarron said. "Designing your own CPU is in vogue right now. That is what Apple does, that is what Samsung does," McCarron said.
But there are also challenges if Motorola decides to go deeper into chip design, Insight 64's Brookwood said. Motorola and Google will need to sell plenty of smartphones to recover the heavy cost of chip development. "If you want to do your own custom chips these days at 28-nanometer, the cost of designing and putting that chip into products is huge compared to what it was four to five years ago," Brookwood said.