Wednesday, March 26,2008 @ 9:00am
Moto spins off mobile, broadband businesses
Motorola today said it would spin off its Mobile Devices and Broadband & Mobility Solutions divisions as separate, public companies. The decision stems from a review of the divisions started by the company in January and is meant to increase the focus of the two previously connected groups. The yet to be renamed Mobile Devices group will concentrate solely on designing cellphones, other handhelds, and the relevant software; Broadband & Mobility will devote its attention primarily to the back end of technology and include the infrastructure for large-scale Internet services as well as the modems and other equipment used at home, Motorola says.
The breakout of the two new companies is expected sometime in 2009 pending US government approval and should result in shareholders owning an equivalent stake in each of the companies.
Motorola's effort to separate the companies chiefly stems from a dramatic drop in the company's cellphone shipments, which plummeted 38 percent year-over-year in late 2007 and was one of the largest contributors to the company's turn from substantial profit to loss over the same period. While Motorola led US marketshare with nearly a third of all devices, the company has suffered abroad and has also struggled to advance its influence on the growing smartphone business ahead of rivals such as Nokia and RIM.