Motorola are looking to separate their mobile phone division from the rest of the company in what some are seeing as the prelude to offloading the division altogether. According to the company’s press release, Motorola are “…exploring the structural and strategic realignment of its businesses to better equip its Mobile Devices business to recapture global market leadership and to enhance shareholder value. The company’s alternatives may include the separation of Mobile Devices from its other businesses in order to permit each business to grow and better serve its customers.”
Obviously this doesn’t mean the Mobile Devices division is for sale yet, but by separating it from the rest of the company, it makes selling it a whole lot easier.
To be honest, this really comes as no surprise. Rumours have been flying around for the past few months about various companies looking to take the ailing Mobile Devices division off Motorola’s hands, with Dell being the latest alleged bidder.
Since the heady days of the RAZR, Motorola’s phones have struggled to compete in the ferocious mobile phones market. Last year, the company was overtaken by Samsung, slipping from second to third place in the rankings of mobile phone companies. Worse, they lost close to $1 billion, which is clearly unsustainable. The company has to do something to redress these losses, and fast.
Unfortunately, its latest line-up of phones isn’t going to do the job, as they’re still languishing behind the leaders, while the latest rumours of phones that are set for release later in 2008 suggest devices that are only on a par with other phones that were released late last year - in other words, by the time they come to market, they’ll still be a year behind.
Motorola is therefore left playing serious catch-up, and has no choice but to refocus. By splitting the division off, it gives itself the option either successfully catching up, or selling the unit on if it continues to underperform. Personally, I think it’ll be sold, as it’s clear by now that Motorola phones just can’t compete with Nokia and Samsung.
[Source: UnwiredView, Motorola]