Motorola to split into two

Motorola has finally found a home for its troubled mobile device business, some three years after the division hit the doldrums.

The US electronics firm will combine the handset business with its home set-top box division to form a new company, as part of a broader restructuring that will see the firm split in two by early 2011.
Restructuring plans announced yesterday reveal the second company will be comprised of Motorola’s enterprise mobile and networks businsesses. The separate companies will be headed up by Motorola’s current co-CEOs Sanjay Jha and Greg Brown
Jha begins his role as head of the mobile devices and home business division straight-away.
Motorola has sought a solution to ongoing problems at its handset division for the past three years, when tumbling quarterly sales signaled the start of a slide that has seen the vendor lose its position as one of the globe’s top five manufacturers by volume.
Prior to the problems, the firm held a solid second place behind Nokia.
The US vendor first planned to spin off the device unit, but put that on ice when the global recession hit in October 2008.
Last year it tried to sell its home and networks businesses for $4.5 billion (€3.29 billion), but the sale stalled because of a lack of buyers.
Motorola said it hoped that combining its consumer-focused set-top and mobile devices arms into one would leave it “best positioned to lead in the convergence of mobility, media, and the internet.”
Jha says the new business “will offer a comprehensive portfolio of mobile converged devices, digital entertainment devices in the home, and end-to-end video, voice and data solutions.”
The enterprise mobility and networks business aimed to “offer a comprehensive end-to-end portfolio of products and solutions, including rugged two-way radios, mobile computers, secure public safety systems, scanning, RFID, and wireless network infrastructure.”
The separation will take place through a tax-free stock dividend of shares in the new companies to existing shareholders.
Both firms will be “well capitalized” and use the Motorola brand following the separation, the vendor said.