Will Two Motorolas Be Better Than One?

Motorola announced this week that the firm's Board of Directors has decided to split the company into two publicly traded entities. One would focus on mobile handsets and accessories while the other would concentrate on its other businesses, including wireless broadband, government, and commercial communications.

The announcement follows the company's evaluation of the structural and strategic realignment of its businesses and represents affirmative steps to positively position its Mobile Devices and Broadband & Mobility Solutions businesses. As Greg Brown, Motorola's President and Chief Executive Officer (CEO), explains, "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."

Of course, the shareholders must be considered, if not the employees. In his announcement of the impending split, Mr. Brown mentions delivering compelling products. Development of innovative products, such as the cellular telephone, have been the cornerstone of Motorola's long history of success, and this will not change whether the company is split in two, four, or a hundred pieces. To the cynical observer, a split is nothing more than the old "shell game," in this case with shareholders playing the role of the carnival ticketholders and Mr. Brown playing the Carney. The split may look good on "The Big Board" of Wall Street for the short term, but it is innovative people with compelling products that will deliver success for the company.

TAGS: Technologies
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