The former Motorola is now officially two companies. On Jan. 4, the Illinois-based business completed its planned separation into two publicly traded companies.
Motorola Solutions, trading under ticker symbol MSI, now
offers solutions for enterprise mobility and vertical markets,
including public safety and government, with data-capture products,
WLAN solutions and integrated command and control communications.
Motorola Mobility Holdings, now trading as MMI, will act as an umbrella
company over a Mobile Devices business unit — offering smartphones,
tablets, etc. — and Motorola Mobility, which leverages the capabilities
of both the Mobile Devices and Home businesses.
“We are pleased that Motorola Mobility has reached this
important milestone. After more than two years of planning, today we
begin operating as a financially strong, independent company trading on
the New York Stock Exchange,” Sanjay Jha, chairman and CEO of Motorola
Mobility, said in a statement. “We are well-positioned to build on the
strong momentum we have in smartphones and end-to-end video solutions —
and to take advantage of opportunities resulting from the convergence
of media, mobility, computing and the Internet.”
It has been reported that the split was partially the
result of pressure from billionaire investor Carl Icahn, but Gene
Delaney, Motorola Solutions’ executive vice president of product and
business operations, has said this wasn’t the case.
“The strategy of Motorola Inc. and the decision we’ve
made was all driven for all the right reasons,” Delaney told eWEEK in
December. “It was not driven by any specific person. It was a holistic
strategy focused on how best can we serve our customers.”
Analyst Roger Kay, with Endpoint Technologies, believes
the separation will indeed prove a good thing for customers, as well as
for the companies.
“Moto was all tangled up in its own underwear, and this
move does allow the two different divisions to pursue separate
agendas,” Kay told eWEEK. “Splitting along segment lines —
commercial/consumer — is a smart way to go. It shows a marketing
orientation. Since selling, marketing and product planning for
each segment is so different, one is often inhibited by the other in
firms that try to get economies of scale across both.”
Under the terms of the separation, stockholders received
one share of Motorola Mobility Holdings common stock for every eight
shares of Motorola Inc. Immediately following the distribution of
the MMI stock, Motorola Inc. completed a 1-for-7 reverse stock
split.
Financial services firm Jefferies & Co. recommended a
“hold” on the Motorola Solutions in a Jan. 4 company update to
investors.
“Motorola Solutions' public safety focus should enable it
to be a stable (if slow) grower with modest margin expansion; however,
there is a fundamental headwind provided by rainy day government funds
running out next summer but tax receipts not picking up until 2012,”
stated the update.
Regarding 4G LTE (long-term evolution) technology,
currently being rolled out by Verizon Wireless, the update added that
MSI will be very bullish on 4G mobile video as a demand driver, “but
2011 will be a year of trials with little revenues.” LTE revenues are
instead expected to begin ramping up in 2012 and 2013.
On MMI, Jefferies in a separate research note likewise
recommended a hold, stating, “MMI is continuing its Android
smartphone-driven turnaround and will soon be in tablets, but concerns
about [first quarter] competition and longer-term product
differentiation difficulties keep us at a Hold and a $33 price target.”
Endpoint’s Kay added, regarding the separation, that
“shareholders should be pleased, but customers may be pleasantly
surprised as well.”
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