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You are here: Home / Mobile Tech / Motorola Spins Off Mobile Division
Motorola Spins Off Its Mobile-Devices Business
Motorola Spins Off Its Mobile-Devices Business
By Mark Long / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Motorola has completed its separation into two independent companies called Motorola Solutions and Motorola Mobility Holdings. Led by CEO Greg Brown, Motorola Solutions said Tuesday it will focus on delivering business communications offerings for commercial enterprises and governments throughout the world.

Motorola Mobility Holdings, which consists of the former mobile-device and home-gear businesses of parent company Motorola, began trading Tuesday morning as an independent company on the New York Stock Exchange. "We are well-positioned to build on the strong momentum we have in smartphones and end-to-end video solutions -- and to take advantage of opportunities resulting from the convergence of media, mobility, computing and the Internet," said Motorola Mobility Holdings CEO Sanjay Jha.

Steering a New Course

The spin-off of Motorola Mobility Holdings isn't expected to have much, if any, impact on the new wireless company's relationships with suppliers, distributors and enterprise buyers, according to industry observers.

"This has been in the works for so long that I don't expect the official split, in and of itself, to impact the new company's relationship with enterprises," noted Lisa Pierce, an independent wireless analyst at the Strategic Networks Group. "Only new functions, new products, [and] new alliances can do that."

When Jha first joined Motorola in 2008, he radically changed the company's mobility direction by championing Google's fledgling Android operating system, a decision that has borne fruit. Tuesday's spin-off gives him yet another opportunity to steer a new course in the delivery of next-generation handsets and other wireless offerings.

"It will be interesting to see which market segments the mobile division elects to focus on," Pierce said. "Between [the Consumer Electronics Show] and CTIA (The Wireless Association), I'm sure we won't have long to wait!"

One product area sure to be on Jha's radar screen is the tablet space -- especially in the U.S., where the Motorola brand is enjoying renewed vigor due to the popularity of the Motorola Droid and Droid X. "We will continue to work aggressively to capitalize on the next generation of converged devices and experiences," Jha said Tuesday.

Forrester Research expects U.S. tablet sales to double in 2011 to 24.1 million units. However, the lion's share of these sales will likely be Apple iPads, noted Forrester analyst Sarah Rotman Epps. "Despite many would-be competitors that will be released at CES, we see Apple commanding the vast majority of the tablet market through 2012," she wrote in a blog.

Still, in a market this big, there's room for more than one player, Rotman Epps observed. "By 2015, 82 million U.S. consumers -- one-third of U.S. online consumers -- will be using a tablet, and not all of them will be iPads," she explained.

Verizon Relationship

According to Gartner, Motorola's former mobility unit ranked seventh worldwide in mobile-phone sales in the third quarter of 2010 with a 2.1 percent share -- down from 4.5 percent one year earlier. However, the handset maker fared significantly better in North America's smartphone market because of the Droid and Droid X.

Motorola has benefited in the past from a strong relationship with Verizon Wireless, which served as a strategic outlet for the handset maker's Android-based smartphones. But with Verizon rumored to be on the verge of getting a CDMA version of Apple's iPhone, Motorola Mobility Holdings may get less support from the wireless carrier in 2011.

Another potential downside is that Motorola Mobility Holdings will no longer have the clout it enjoyed as part of Motorola. Both new entities also may find themselves competing for a share of the business market with respect to tablets.

Fitch Ratings was upbeat about the spin-off's effect on the Motorola Solutions. The business-rating agency said the separation of Mobility Holdings "meaningfully strengthens Motorola Solution's operating and financial profile."

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Posted: 2011-01-07 @ 6:35pm PT
What were the numbers used in the spin off. IE share & price ratios.

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