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Motorola wants a Mobile Devices business and Broadband and Mobility solutions business.

Of the well known mobile phone handset makers in the industry, Motorola is certainly one of the big names. Motorola had huge success with its first generation RAZR phone in 2005. Since the introduction of the first RAZR, Motorola has been having a hard time gaining ground on the market leaders in the mobile handset market.

DailyTech reported in January 2008 that Motorola announced it was considering leaving the handset business after reporting a Q4 2007 loss of $1.2B and seeing its handset market share drop to only 23%. In February, DailyTech reported that Motorola was in a three-way tie for the next to bottom spot among handset makers with Samsung, Nokia and Sony/Ericsson for customer satisfaction.

Rather than simply sell off its mobile phone operations Motorola announced today that it wants to create two new stand-alone companies out of its current company arrangement. Motorola proposes to create a Mobile Devices business, which would design, manufacture and sell mobile handsets and accessories globally. This business would also license a portfolio of intellectual property.

The other business would be the Broadband & Mobility Solutions business that would include Motorola’s Enterprise Mobility, Government and Public Safety, and Home and Business Networks businesses. This business would make, design, integrate and service voice and data communications equipment and wireless broadband networks worldwide.

Motorola’s chief executive officer and president, Greg Brown, said in a statement, “Our decision to separate our Mobile Devices and Broadband & Mobility Solutions businesses follows a review process undertaken by our management team and Board of Directors, together with independent advisors.”

“Creating two industry-leading companies will provide improved flexibility, more tailored capital structures, and increased management focus – as well as more targeted investment opportunities for our shareholders.”

Brown went on to say, “Our priorities have not changed with today’s announcement. We remain committed to improving the performance of our Mobile Devices business by delivering compelling products that meet the needs of customers and consumers around the world.”

Motorola says that the creation of the two stand-alone businesses is expected to be completed as a tax-free distribution to Motorola shareholders. The deal is subject to further financial, tax and legal analysis and shareholders would end up holding shares of two independent publically traded companies. 

The transition is pending the implementation of inter-company agreements, filing of documents with the SEC and a ruling on the tax-free nature of the arrangement by the IRS.

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Ed Zander: What Happened?
By brianhem10 on 3/27/2008 1:48:11 AM , Rating: 2
My brother used to work for Zander's private equity firm and always heralded him as a financial genius. What happened to him saving the company, being praised for bringing "Moto" to life and up from the bottom of the pack.

Personally, RAZR's are to cell phones what iPods are to MP3 players - every thinks they look nice and everyone has them, so everyone wants one; however, there are better products out there for a better price. Moto phones also go with the Domino's mentality of "an average Pizza at an average price". Moto Q - what a joke, but a decent deal.

Most importantly, the cell phone industry is in the middle of a shift to mass-adoption of smart phones. As a college student, at least 60-70% of my friends have Blackberry's, Palm's, or Pocket PC's. My one friend with a Moto Q always complains about it. I saw a middle-schooler with an HTC Touch yesterday. Moto's greatest strength led to its demise recently.

Back to my original question about Ed Zander - how does someone who changed a company around so quickly and adapted to the market fail to do the same right now?

RE: Ed Zander: What Happened?
By brianhem10 on 3/27/2008 1:52:12 AM , Rating: 2
And yes, I know Greg Brown is now the CEO, but this mess isn't his fault.

RE: Ed Zander: What Happened?
By Aloonatic on 3/27/2008 6:26:08 AM , Rating: 2
Not sure if things are different in the states, but the RAZR and PEBL brands dies off quite a long time ago in the UK

I know lots of people who had a RAZR when they came out and most of them sent them back after a short while when they saw the other phones that came out. RAZRs really were very basic.

Great if you want a slim phone to fit in your purse and do little more than text, don't get me wrong, but that's about it.

It seems that someone high up saw good sales and figured that they didn't need to do anything to a "successful" formula, until it was too late.

The latest iteration is a pretty descent phone with plenty of features, but when you can get a K850i/W960i or N95 8GB (my choice) for free on most contracts there really isn't much choice, and the one good feature of being a slime phone has been sacrificed for features, making it almost pointless.

I think I only know one person now with a Motorola mobile phone. Someone really dropped the ball.

Maybe it's just a rough patch they're going through and they'll come out with something as apparently great as the original RAZR was. Competition is good and the more companies there are making phones, the more ideas are bought to market.

Nokia went through a poor spell a couple of years ago when they refused to accept that a lot of people wanted clam-shell phones and went for crazy "fashionable" designs but seem to have sorted themselves out now.

There's always hope.

RE: Ed Zander: What Happened?
By aebiv on 3/27/2008 12:55:08 PM , Rating: 2
I don't know about anyone else, but I've always had the best luck with reception and the phone just plain working for me when it comes to Motorola.

Sure, the RAZR line was a fad, but I loved my KRZR as it was the most durable, excellent battery life phone I've owned.

I now own the new Q after owning a HTC Touch and the Tilt. Both the Touch and the Tilt were excellent devices, but my Q is half the size, and works just as well (within the limitations of no touch screen).

All of this is beside the point though, as I hardly know anyone without a Motorola phone. In fact, when Motorola was rumored to possibly withdrawl from the mobile phone market, many of my friends and coworkers asked me what they were going to do now for a phone.

The Samsungs are a joke, as even the new Blackjack is locked down tight compaired to my Q9h. Nokia, has some wonderful phones, but some of us don't want the symbian OS on a $700 dollar phone. We'd rather be able to use it with everything else.

What motorola needs to do, is just have some better advertising and push the smart phone. Give us another Q, but with touchscreen and double the memory.

"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton
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