Motorola to split in two
By James • Feb 12th, 2010 • Category: Industry News- Photo: Motorola
Telecommunications giant Motorola has put in motion plans to split into two publicly traded companies by the first quarter of 2011. This decision comes after years of struggling to separate and distinguish its business units, and will see one company focused on enterprise networking while the other focuses on their mobile devices and set- top boxes business.
Lacklustre product
- Photo: Motorola
Motorola has been without a hit device since its Razr phones, although their Android-based Droid device was well received. Their inability to keep up with the transition toward high-end mobile devices from functional phones in their biggest market, the US, has meant the company has had to consolidate its business on that front.
Economic woes
The financial crisis also softened their set-top boxes business, and continued consolidation in telecoms meant their networking business was undermined too.
Investor pressure
- Photo: Motorola
This is not the first time Motorola has indicated intentions to split the company. This strategy was first announced in the wake of a battle for control of the company instantiated by billionaire investor Carl Icahn. Those plans were altered largely due to Motorola’s struggles to consolidate the business, as well as the pressure the financial crisis was exerting on it.
The company hopes the two stand-alone entities will be better able to cater to their customers, with their consumer business more focused on product execution and its enterprise business more keenly wired to servicing its clientele.
Consolidation and leadership
Motorola has stated that both entities will retain the Motorola brand, while co-chief executives Sanjay Jha and Greg Brown will head up the mobile devices and enterprise business, respectively. Whether this post-financial crisis switch will be enough to alter Motorola’s prospects in a completely different cellular landscape from the one Motorola dominated with the Razr remains to be seen.
