Motorola Once Again Reshuffles Business Units - InformationWeek
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7/28/2008
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Motorola Once Again Reshuffles Business Units

The handset and networking vendor said it will split its Home & Networks Mobility group into three separate businesses.

With its second-quarter financial results scheduled to be reported Thursday, Motorola on Monday announced a restructuring of various units in its latest effort to find a formula for success. Motorola said it will split its Home & Networks Mobility group into three separate businesses.

The company, whose flagship handset unit has been losing market share at a rapid rate, has been rearranging its businesses to attract potential buyers. Billionaire investor Carl Icahn, who has a substantial investment in Motorola, has been agitating for the communications company to sell some operations, because he and many investors believe the company will be worth more broken up than intact.

The company has been willing to consider offers for its handset operation, but to date there have been no takers for the unit, which has been overshadowed by Nokia and Samsung. Motorola, however, has retained solid handset sales in the United States, its brand is still magic with many, and some of its other units remain solidly in the black.

While the handset operation has attracted no potential serious buyers, some investment banking analysts have suggested that Motorola could sell off some of its nonhandset units and focus on returning the mobile phone unit to profitability.

In a statement, a Motorola spokeswoman said the reorganization of the Home & Networks Mobility group would enable it to be "agile, focused, and ideally aligned to realize its growth potential." The division posted revenue of $2.4 billion in the first quarter.

The restructuring will create three units: Broadband Access Solutions, including the company's WiMax operation; Broadband Home Solutions, including set-top boxes; and Cellular Networks, which will offer wireless infrastructure products. The company had announced a reorganization of H&N a year ago.

Motorola announced the latest reshuffling in a memo to employees last week, and The Wall Street Journal reported the reorganization over the weekend. Quoting from the memo, the newspaper said the "changes are not a reaction to Motorola's separation plans or a cost-cutting measure," but are aimed to "position our business for continued success over the next five years."

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