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Motorola proposes to split into 2 firms
By Ritsuko Ando and Sinead Carew |
February 13, 2010, Saturday
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Print Edition
Print Edition
MOTOROLA Inc aims to split into two companies in the first quarter of 2011, one to focus on cell phones and television set-top boxes, and the other on enterprise networking.
Motorola said on Thursday that splitting into two independent and publicly traded companies would help improve its position in the different markets.
The company's money-losing mobile devices unit has been struggling to compete with new smartphones, and has not had a blockbuster since the Razr, although its Droid phone generated some buzz since launching late last year.
Its set-top box business had also suffered due to a weak economy, while its wireless network equipment business had been hit by a consolidation among telecommunications operators.
"It's hard to work with a company when you don't know where they'll be a year from now. So this removes uncertainty," Broadpoint Gleacher analyst Mark McKechnie said of Thursday's announcement. "I do think the smaller divisions can offer some operational efficiency and focus."
Motorola's latest financial results show its mobile phone business had revenue of US$7 billion for 2009. The enterprise wireless business had revenue of US$2 billion while home and network sales generated US$2 billion.
"We believe that as independent companies each business will be best positioned to successfully pursue the respective strategies and opportunities for growth," said Greg Brown, who was co-CEO of Motorola and will now become head of the enterprise mobility and networking business.
Sanjay Jha, the company's other CEO, will head the mobile devices and home business, it said.
Motorola said on Thursday that splitting into two independent and publicly traded companies would help improve its position in the different markets.
The company's money-losing mobile devices unit has been struggling to compete with new smartphones, and has not had a blockbuster since the Razr, although its Droid phone generated some buzz since launching late last year.
Its set-top box business had also suffered due to a weak economy, while its wireless network equipment business had been hit by a consolidation among telecommunications operators.
"It's hard to work with a company when you don't know where they'll be a year from now. So this removes uncertainty," Broadpoint Gleacher analyst Mark McKechnie said of Thursday's announcement. "I do think the smaller divisions can offer some operational efficiency and focus."
Motorola's latest financial results show its mobile phone business had revenue of US$7 billion for 2009. The enterprise wireless business had revenue of US$2 billion while home and network sales generated US$2 billion.
"We believe that as independent companies each business will be best positioned to successfully pursue the respective strategies and opportunities for growth," said Greg Brown, who was co-CEO of Motorola and will now become head of the enterprise mobility and networking business.
Sanjay Jha, the company's other CEO, will head the mobile devices and home business, it said.
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