Motorola's board and executive team feel that separating the strong portion of the company -- its networking equipment and enterprise devices business -- from the weak portion is the way to go. When Motorola acquired Symbol Technologies several years ago, it inherited a company with strong ties to the enterprise. Even though Symbol was plagued by its own financial difficulties in the earlier part of this decade, the two companies have, by all appearances, made themselves into a cohesive unit. It has been one factor keeping Motorola operational and has emerged as the stronger side of the business.
We all know about Motorola's handset woes. Something must be done. But what is gained by separating the company? Motorola said the creation of two companies would improve flexibility, increase management focus, and provide more targeted investment opportunities for shareholders. But who's going to invest in the handset division right now? How will existing shareholder assets be divided? Will they have a choice which portion of the company their investment goes to? Right now, the mobile device division doesn't look like the best investment to make.
I have to disagree with Motorola's belief that separating out the handset unit will help it focus better. Think about its two closest competitors: Nokia and Samsung. Both companies are huge in scale, and operate multiple, disparate business units successfully. Why can't Motorola do the same?
The blame can only be with management. Not that I advocate anyone losing their job, but Motorola needs to bring in new managers who have a different vision for the mobile device division and can do something with the talented engineers who work there.