Possible split lifts Motorola shares

Motorola's investors were placated for at least a day, and sent its battered stock soaring 10.3% last week, after the company signaled it may get out of its trademark cell-phone business, an Associated Press report said.

The Associated Press report quoted industry analysts as saying that the handset maker could get at least $5 billion for the troubled unit.

But they cautioned that a sale, spinoff or joint venture won't alter the unit's severe challenges and said the lack of promising products in the pipeline may be a deterrent to any buyer.

The company also faces the prospect of more job cuts and a repeat proxy fight with the shakeup-minded Carl Icahn, who nominated four new members for the board of directors and told Motorola he has increased his stake to 5%, the report said.

Wall Street applauded Motorola's decision to explore alternative strategies, issuing several upgrades, the report said.

Thecompany's shares jumped $1.19 to $12.69 in Friday trading after rising as high as $12.97. That's only half their value of 16 months ago but a whopping 35% higher than last week's 4 1/2-year low of $9.43.

Underscoring its commitment to change, Motorola said late Friday that new CEO Greg Brown had assumed day-to-day responsibilities of the phone business, which had been led since last summer by Stu Reed.

The Associated Press report quoted Citigroup analyst Jim Suva as saying that the decision to make big changes under new CEO Greg Brown is 'a potentially life-saving move for the mobile devices business,' which accounted for $19 billion of Motorola's $36.6 billion in sales last year.

Motorola's troubles stem not only from the lack of a top-selling successor to the Razr but also from its aggressive price-cutting to try to catch Nokia, the runaway leader in handset market share, the report further said.