Share this article

print logo

Getting nimbler, Motorola splits in two: Mobility and Solutions

Motorola, the 82-year-old consumer electronics pioneer responsible for early televisions, cell phones and even the first broadcast from the moon, split into two companies Tuesday in a reflection of changing markets.

As separate companies -- Mobility, targeting consumers, and Solutions, for professionals -- the two will have simpler stories to tell investors and a nimbler approach to developing cutting-edge products such as tablet computers.

Sanjay Jha, CEO of consumer-focused Motorola Mobility Holdings, said in an interview that the new company will benefit from a narrower focus, all the way up to the top management and the board of directors.

"I think you'll see a board that is much more focused on understanding technology as opposed to managing a portfolio of products," Jha said.

For decades, Motorola's products told the story of the march of electronics into the hands of consumers: car radios in the 1930s, TVs in the '40s and cell phones starting in the '80s.

The company also expanded into police radios and bar code scanners aimed at government agencies and large businesses. These divisions complicated the picture Motorola painted for investors; now they make up the second company, Motorola Solutions.

With the breakup comes a shrunken bureaucracy, which both companies hope will help them make faster decisions and compete better in the marketplace.

Especially in the consumer business, Motorola can't afford to take its time incubating new products while subsisting on revenue from other divisions, Jha said.

Dan Maloney, Mobility's president, also said a smaller company that excels at just a few things might spur employees to be more creative.

"Inside Motorola, it was difficult at times for employees to understand how what they were doing was going to directly have an impact on financial performance because it was such a large, multifaceted entity," he said.

As part of the breakup, Motorola is selling its cellular network equipment division to Nokia Siemens Networks, a Finnish-German joint venture. Regulators in China are still reviewing the $1.2 billion sale, which is expected to close in the next three months.

Motorola's cell phone division once enjoyed strong sales thanks to the Razr, a 2004 feature phone that became a best seller. As recently as 2007, cell phones accounted for two-thirds of the company's revenue. But without a blockbuster smart phone, the division fell into a slump that lasted until the most recent quarter.

Shares of Motorola Mobility Holdings climbed by $2.88, or 9.5 percent, to close at $33.12 Tuesday. Motorola Solutions' stock closed unchanged at $39.77. The shares were trading on the New York Stock Exchange with the ticker symbols MMI and MSI, respectively.

There are no comments - be the first to comment