With Motorola's breakup scheduled for January, the company’s mobile phone unit must grapple with several issues, including whether to keep its chief focus on the Android platform.
At the same time, Motorola will have to deal with the relentless revenue decline at its aging iDEN product portfolio that it develops for Sprint Nextel.
While the iDEN business is expected to drop from $400 million this year to $300 million next year, the Mobility cell phone unit expects to continue its focus on developing Android phones.
With Wall Street financier Carl Icahn forcing the breakup, Motorola said this week that it has pinned down January as the month for the breakup. Earlier, the company was vague about a breakup date, saying only that it would happen in the first quarter of 2011. Co-chief executive Greg Brown, who will head the Motorola Solutions operation, said he expects Solutions will have investment grade status at the time of the split.
At an analysts meeting this week, Brown was bullish on the company’s enterprise business, remarking that the business has bounced back nicely from the recession. Motorola’s strong position in public safety networks also hasn’t been hit hard by the recession. The breakup will help Motorola Solutions, because a separate Motorola Mobility won’t a financial drag on Solutions.
Co-CEO Sanjay Jha has led the Mobility unit in an attempted turnaround by focusing on Google’s Android cell phone platform. Motorola practically invented the mobile phone, but its market share has been in a relentless decline in recent years. The Android recently overtook Apple’s iPhone in market share, but several developers share in the Android’s success. For instance, HTC markets its popular EVO handset to Sprint's WiMax subscribers in a market that had been a stronghold for Motorola.
Jha, who came to Motorola last year from Qualcomm, hasn’t said much about his plans for the new Mobility unit -- which will house set-top boxes as well as cell phones. Earlier this year, Jha suggested the Mobility unit could move to California to be closer to the talent responsible for much of the R&D in the cell phone world.
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