Motorola to split business into two in 2011

Motorola said it aims to split into two companies in the first quarter of 2011, one to focus on cellphones and television set-top boxes, and the other on enterprise networking.

Motorola said yesterday that splitting into two independent and publicly traded companies would help improve its position in the different markets.



Motorola shares rose 2.3 per cent to $6.80 in extended trade after the news, which followed months of speculation over what steps management would take to revive its business.



The company's money-losing mobile devices unit has been struggling to compete with new smartphones, and has not had a blockbuster since the Razr, although its Droid phone generated some buzz since launching late last year.



Its set-top box business had also suffered due to a weak economy, while its wireless network equipment business had been hit by a consolidation among telecom operators.



"It's hard to work with a company when you don't know where they'll be a year from now. So this removes uncertainty," Broadpoint Gleacher analyst Mark McKechnie said of Thursday's announcement. "I do think the smaller divisions can offer some operational efficiency and focus."



Motorola's latest financial results show its mobile phone business had revenue of $7 billion (£4.47 billion) for 2009. The enterprise wireless business had revenue of $2 billion (£1.2 billion) while home and network sales brought in another $2 billion.



"We believe that as independent companies each business will be best positioned to successfully pursue the respective strategies and opportunities for growth," said Greg Brown, who was co-chief executive officer of Motorola and will now become CEO of the enterprise mobility and networking business.



Sanjay Jha, the company's other CEO, will head the mobile devices and home business, it said.



Motorola said the move will take effect through a tax-free stock dividend of shares in the new company. Its enterprise and network equipment business will be the entity responsible for Motorola's current public debt and will be capitalized to achieve an investment grade rating, it said.



Both companies will use the Motorola brand. Additional details including the capital structure of the companies will be announced later, it said.



Jha said that the combination of businesses dealing with mobile phones, cable set-top boxes and other home entertainment devices was ideal to meet consumers' demands for "converged" or seamless access to television, phone and Internet.



Motorola had previously said it would split its handset unit from its other divisions, but executives also looked at other alternatives.



Motorola had tried to sell its networking division but a source familiar with the matter recently said the process had slowed down.



Tavis McCourt of Morgan Keegan said he was not sure whether the combination of the handset and cable set-top box businesses would yield synergies, but still saw the plan as positive.



"I'm glad they're doing it. It's nice they're putting timing behind it. It's a sign they're very confident in their handset business this year," he said.

PROMOTED VIDEO
Life and Style
ebookA wonderful selection of salads, starters and mains featuring venison, grouse and other game
News
video
Life and Style
tech
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    SQL Report Analyst (SSRS, CA, SQL 2012)

    £30000 - £38500 Per Annum + 25 days holiday, pension, subsidised restaurant: C...

    Application Support Analyst (SQL, Incident Management, SLAs)

    £34000 - £37000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

    Developer - WinForms, C#

    £280 - £320 per day: Progressive Recruitment: C#, WinForms, Desktop Developmen...

    Java Developer

    competitive: Progressive Recruitment: My Client are a successful software hous...

    Day In a Page

    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform