Motorola to split in two

Motorola to split into independent home and enterprise companies in 2011

US comms vendor Motorola has announced it is to split into two independent publicly traded companies in early 2011. One is to formed around its mobile handset and home businesses, while the other will focus on enterprise mobility and business networking.

The Chicago-based firm currently has two co-chief executives, Sanjay Jha and Greg Brown. In a statement, Motorola said Jha would become chief executive of Motorola’s Mobile Devices and Home business, while Brown would head up the Enterprise Mobility Solutions and Networks business, both effective immediately.

Motorola also said that the separation would be achieved "through a tax-free stock dividend of shares in the new company to Motorola shareholders".

The Enterprise Mobility and Networks business will be responsible for Motorola's existing public market debt at the time of separation, while the Mobile Devices and Home business is expected to own the Motorola brand and license it royalty free to the new networking spin-off.

Jha said the focus for the Mobile Devices and Home business would be "a comprehensive portfolio of mobile converged devices, digital home entertainment devices, and end-to-end video, voice and data solutions."

Meanwhile, the Enterprise Mobility Solutions and Networks business will offer an end-to-end portfolio, including rugged two-way radios, mobile computers, secure public safety systems, scanning, RFID, and wireless network infrastructure, according to Brown.

The maker of the famous 68000-series 32-bit processors has been buffeted by economic headwinds in the past several years. Motorola originally intended to form a new company around its declining cell phone business in 2008, a plan derailed by the global downturn.

Motorola posted a $142m (£90m) profit for the fourth quarter of 2009 on the back of $5.7bn (£3.6bn) revenues - a big recovery on its recent past performance. The firm has seen respectable interest in its Droid mobile device, launched last Autumn and the first handset to use Google's Android operating system, but hasn't been able to repeat its big 2005 success with the Razr mobile phone.

Motorola acquired pioneering wireless technology firm Symbol in 2007 giving it a route into the enterprise mobility and radio frequency identification (RFID) markets.