Motorola’s booth at the Consumer Electronics Show. (AP, File)
| By Wailin Wong | Motorola Inc. on Thursday unveiled a new plan for splitting into two companies, combining its mobile devices division with the cable set-top box business, instead of creating a standalone phone unit. The other company will include wireless networks and communication gear for governments and businesses. The Schaumburg-based company had signaled nearly two years ago that it |
See also • Greg Burns: Why breaking up Motorola is hard to do |
The new plan, which is targeted for the first quarter of 2011, is the result of that analysis. It also stems from the belief that the increasing mobility of multimedia content would create a successful marriage between mobile phones and “home,” the segment that oversees cable and video technology.
“The consumption of media is exploding as consumers want to take their in-home content with them,” co-Chief Executive Sanjay Jha, who oversees mobile devices and now will run the home business, said on a conference call with analysts. Jha’s portfolio change was effective immediately.
Previously, the home business shared a division with Motorola’s wireless network business. Co-Chief Executive Greg Brown will head the other half of Motorola, known as enterprise mobility and networks.
Motorola is planning to spin off one of the new entities through a tax-free stock dividend of shares in the new company, although it hasn’t said which part.
Executives did clear up one key issue on the separation: Motorola’s brand name. Both companies will use the brand, with the mobile devices and home business owning it and licensing it royalty-free to the other company.
Analysts pointed out that Motorola has struggled with how to manage a large collection of businesses that didn’t have a lot in common. The new arrangement, while still raising skepticism among some Motorola watchers, does loosely group the businesses together by customer base. Mobile devices and home make products that are ultimately intended for the consumer, while enterprise mobility and networks work primarily with business users.
In an interview with the Tribune, Brown said the previous structure for Motorola’s businesses was, in some ways, an interim arrangement while the company tried to revive the struggling phone segment. Mobile devices and home weren’t combined sooner because the phone unit needed to be “isolated with the appropriate resources and focus,” Brown said.
Yes, the company will split into two, a phone and a battery. Then, they will consolidate 10 years later realizing the two must be together, call it a reorg, and lay off all the workers who helped seperate it.
Fuzz Off, Moto!
Motorola is just trying to focus on the units that are strong and profitable. Considering that they dominate the two way industry, it is understandable that they spend the lion’s share on protecting this edge. Developing new technologies at the expense of losing your glory got them into trouble a decade or so ago. To those who don’t understand this business move I suggest remedial education is in order for them.
They were #1 in cell phones, now nobody wants they junk phones. The people who ran moto, did a bush. Ran it into the ground. Go Nokia….
The Titanic also split in two, did not have a happy ending.
Smart move. Split off the cell phone and cable box business and let them die rather than kill the other business. Motorola cell phone suck.
I was there for 16 years… the boat started sinking in the late 90s, it has taken this long for the split to happen, now let’s see how long it takes to sink…
The mobile sector was once #1, the infrastructure sector was once well regarded in the industry for it’s effective somewhat antique products (they used a 60s era phone switch for their mobile switch), two way radios and public service systems were once #1… it looks like they dragged their feet for far too long… the market was moving faster than what the old fellows at the tower building were used to.
It’s hard to imagine how many people forget this commonsense stuff. Thanks for sharing. BTW – this would make a great tweet, do you use Twitter?