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Motorola to be Split Into Two in 2011

Motorola to be Split Into Two in 2011

Photo: F. Montino/Flickr (CC)

Michael Barkoviak

Motorola has unveiled plans to split the company into two independent companies, with the mobile phone business expected to join the Motorola cable set-top box business unit.

Splitting into two halves has been in discussion for more than two years, but the company waited while the mobile phone business suffered even worse sales numbers compared to competitors.

The company’s business unit struggled greatly, but the release of the Motorola Droid Android-powered smartphone has greatly helped the company.  A bit more additional financial security led to the ability to finally split the company.

“We have been at times a drain on resources on other businesses, and we’ve reduced shareholder value,” said Motorola co-CEO Sanjay Jha, on on a conference call.

Both Jha and co-CEO Greg Brown expect the split to help add value to the newly independent companies. Jha will oversee mobile phones and set-top boxes, while Brown will be responsible for telecommunications equipment and two-way radios.

The Motorola board of directors supports the split, which will allow the company to better focus on select product lines to market to consumers.

Motorola racked up $22 billion in sales during its last fiscal year, with each business expected to contribute about $11 billion towards the figure moving forward. Although they’ll be operated as separate entities, they’ll both operate under the Motorola business brand.

The split is expected to be finalized during Q1 2011. 

_© 2009, DailyTech