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Motorola to split into two parts

12 February 2010 10:50 (UTC +04:00)

Baku â€“ APA-Economics. Motorola confirmed on Thursday that it planned to reorganize into two independent companies by the first quarter of 2011, with its mobile handset unit and its television set-top box division being combined and spun off as a separate publicly traded company, the New York Times reports.

The announced split is meant to finally divide Motorola into smaller, more focused operations, pulling apart the collection of often disparate businesses assembled over the years by the company, which is based in Schaumburg, Ill.

Sanjay Jha, one of Motorolaâ€™s two co-chief executives, will oversee mobile handsets and set-top boxes, effective immediately. The remaining operations â€” Motorolaâ€™s wireless networking business and its enterprise radio systems operations â€” will be headed by the companyâ€™s other co-chief executive, Greg Brown.

As envisioned by company executives, the split would create two independent companies, each of which accounted for roughly half of Motorolaâ€™s $22 billion in sales in 2009. The companies will be split through a tax-free stock distribution to shareholders. The mobile handset and set-top box business will own the Motorola brand and will license it royalty-free to the enterprise and networking company.

Now Motorola is betting the future of the handset business on producing smartphones built largely on Googleâ€™s Android platform. That effort has already borne fruit, according to Mr. Jha. He said the company became one of the largest shippers of smartphones last quarter, thanks to offerings like the Droid phone for Verizon Wireless. He said the company expected to ship 20 smartphone models this year.

Combining the handset unit with the set-top box operations, which deliver digital video services, fits into a â€œseamless mobilityâ€ lifestyle envisioned by carriers like AT&T and Verizon. The idea is that customers would watch content interchangeably on their televisions, computers and mobile phones.