Motorola to split in two

Motorola will split into two companies, one making mobile devices and the other making network infrastructure.

Motorola will split into two companies, one making mobile devices and the other making network infrastructure, the company announced Wednesday.

The companies will operate separately and be publicly traded. Motorola expects the split to take place in 2009, if it gets the necessary approvals.

"Everyone agrees Motorola had to do something, the split will relieve some of the pressure from stockholders," director of research at CCS Insight, Ben Wood, said, who at first glance thinks the split makes sense.

The decision to split into two follows a review of the company's mobile phone business, announced Jan. 31 and conducted by the management team, the board of directors and independent advisors. Motorola is following in the footsteps of Nokia, which put its network activities into a joint venture with Siemens, and of Ericsson, which put its mobile phone business into a joint venture with Sony.

"The mobile phone division has taken a bit of a beating, and this is what you get," directing analyst of WiMax, Wi-Fi, and Mobile Devices at Infonetics Research, Richard Webb, said.

The split will provide improved flexibility, more tailored capital structures, and increased management focus -- as well as more targeted investment opportunities for shareholders, according to Motorola's president and CEO, Greg Brown, said.

Analysts agree the split will bring improved focus, especially for the mobile phone company.

"[The mobile phone part] won't have to take the infrastructure side into consideration, and the split may also help raise its profile," said Webb.

But that can also be a bad thing. It was in part because of handsets that Sprint dared to make its big gamble on WiMax, which has proved problematic.

In the end, the mobile phone business needs a healthy and competitive Motorola, according to Wood.

"It's needed to provide some balance with Nokia. A Nokia-Samsung duopoly isn't good for anyone," he said.

Based on current plans, the creation of the two stand-alone businesses is expected to take the form of a tax-free distribution to Motorola's shareholders, subject to further financial, tax and legal analysis, resulting in shareholders holding shares of two independent and publicly-traded companies, Motorola said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Mikael Ricknäs

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?