It's Splitsville for Motorola
After struggling to regain its footing and pressure from
high-powered investor Carl Icahn, the company is splitting into two
After struggling to regain its footing and pressure from high-powered investor Carl Icahn, the company is splitting into two businesses.
The move comes after outspoken shareholder Carl Icahn and his allies on the Motorola board of directors began adding more pressure on the company to split into two. While Motorola ranks as the third largest cell phone maker in United States-down from No. 2-its handset sales have dropped since the introduction of the popular RAZR model in 2004. The company has not succeeded in producing a successor to the RAZRm, and Nokia and Samsung have dominated the market since then.
"We remain committed to improving the performance of our Mobile Devices business by delivering compelling products that meet the needs of customers and consumers around the world," Brown said in the statement. Michael Sullivan-Trainor, an analyst with Technology Business Research, said the fight over the future of Motorola came down to the legacy of the RAZR and the company's inability to find a worthy successor. "It's a story about the RAZR," Sullivan-Trainor said. "The RAZR was a product innovation that the company rode too long, and basically they didn't have a follow-on for it within the handset business. The company was relying on the handset business for all of its income, and so the handset business went south and they didn't have a follow-up business." When Motorola reported its fourth-quarter returns in January, it announced that it shipped 40.9 million handset units, compared with 65.7 million units during the same time last year. Those returns seemed to have given Icahn and his allies the ammunition needed to force the change they wanted.