Motorola is in talks with Nokia Siemens Networks about selling a unit of the company that’s responsible for older-generation telecommunications equipment, the Wall Street Journal reported July 13, citing people familiar with the matter.
Were the deal to go through, the Journal estimates that it could be worth $1.1 billion to $1.3 billion. For Nokia Siemens Networks – a joint venture between handset-maker Nokia and Siemens AG of Germany – it would also offer direct access to Motorola’s telecommunications customers as they look to upgrade their equipment. Such access could prove key in successfully competing against suppliers such as China’s Huawei Technologies. (Along with Motorola, Huawei is, among other things, a supplier of equipment to Clearwire for its WiMax network.)
Earlier this year, Motorola announced that it planned to split into two independent and publicly traded companies during the first quarter of 2011. One company will consist of Motorola’s Mobile Devices and Home units and the other of its Enterprise Mobility Solutions and Networks units.
While focused on the split, the Journal reports that Motorola co-CEO Greg Brown said the company “would consider offers for the networks business” and has since entertained at least one – from Huawei. Those negotiations, however, were unsuccessful, according to Journal sources, likely to due to security concerns.
Motorola’s handset unit has struggled in recent quarters, and an April 29 report from research firm IDC showed it being knocked from the top-five list of worldwide cell phone vendors by BlackBerry-maker Research In Motion – the first change to the top-five list in five years. Selling its networks business could help Motorola refocus on its smartphone business, which saw its last major high with the RAZR feature phone. Most recently, it found some success with the Android-running Motorola Droid. Surprising many, the Droid beat out the Apple iPhone 3GS by topping Time magazine’s 2009 “Top 10 Gadgets” list.
A deal between Motorola and the Nokia Siemens Networks, reports the Journal, could be reached in the next few weeks – or else fall apart all together.