Motorola Split: Breaking Up Is Hard to Do

Company's plan to separate its handset business brings out the skeptics.


The tone is mournful over at Portfolio's Tech Observer, where Kevin Maney says Motorola's plan to spin off its handset division "smells more like the death of a great American company." He discusses the company's beginnings as the Galvin Manufacturing Corp. in 1928, founded by brothers Paul and Joseph Galvin (and later renamed "Motorola" to suggest sound in motion). Says Maney: "Motorola's individual businesses might do fine. Perhaps they'll surprise everyone and bounce back. But at the moment, the split seems like a giant step back from greatness—and maybe a step toward that place where you'll find other once-iconic names like Polaroid, Westinghouse, and Sears."

Meanwhile, PC Magazine asks: Can Motorola's handset business stand alone? Deal Journal wonders if the move is just a "cosmetic rearranging" meant to appease investor Carl Icahn.

Separating the mobile phone business isn't a cure-all, writes Morningstar analyst Michael Hodel: "The unit continues to burn cash and lose market share as it struggles to design compelling new products and create a cost structure suitable to effectively serve high-growth markets like India and China. This move adds little to the firm's capabilities in these areas."


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