updated 08:00 am EDT, Mon July 28, 2008
Moto to Split Home Network
Motorola will break up its Home and Networks Mobility group in a move which is likely meant to prepare for a potential sell-off, according to a memo obtained by the Wall Street Journal. The company will purportedly create three divisions; two will involve networks and see Motorola divide its networking efforts into a Cellular Networks group, for traditional cell service, as well as a Broadband Access Solutions group that handles wide-area wireless technology such as Long Term Evolution (4G) or WiMAX. The third will handle all digital video, including cable boxes, DVRs, and IPTV.
The company acknowledges the change and says it will make the move to stay "agile" and "ideally aligned" to grow, according to a spokeswoman.
Oppenheimer analyst Ittai Kidron, however, argues that the reorganization is likely to make it easier to sell parts of the company it doesn't need and to recover its core cellphone business, which separately is believed to be dropping to fifth place in market share as it continues to lose influence in mid-range and high-end phones. Motorola could be engineering a "reverse spinoff" that sells off most businesses to keep the cellphone-related Mobile Devices group associated with Motorola, according to Kidron.
Motorola is expected to announce its financial results on July 31st and is thought to be dividing the company in preparation for what it will say at the event.