Motorola has revealed details of its plan to split into two companies in the first quarter of 2011, one focusing on its mobile business and the other specialising in the enterprise sector.
The company has filed a Form 10 Registration Statement with the Securities and Exchange Commission, which provided information about Motorola SpinCo Holdings, the subsidiary that will be in charge of setting up the new spin-off companies.
It will be setting up Motorola Mobility, to be headed by Sanjay Jha, current co-CEO of Motorola and CEO of the Mobile Devices and Home Businesses division. This company will take control of Motorola’s handset and home entertainment developments.
A key focus for Motorola Mobility will be “multiscreen experiences”, allowing users to view the same content across multiple platforms, including mobile phones and TVs. This suggests that Motorola is keen to follow in Samsung’s footsteps with its BaDa operating system. Samsung is planning to offer multiscreen experiences across a variety of mediums, including phones, TVs, laptops, and even its own Tablet PC – all completely integrated by BaDa. Deja Vu? Maybe, but with Motorola losing ground to other key players in the mobile market, creating a multi-device experience may be just what it needs to gain the edge. It’s a wise move.
As someone commented on our story about Samsung’s Tablet PCs and multi-screen platform strategy: “Integrating all of your screens to work with a T-PC is genuinely the most revolutionary thing that I’ve heard in a long time.”
The remainder of Motorola will be renamed to Motorola Solutions and will be headed by the other co-CEO, Greg Brown. His company will specialise in Enterprise Mobility Solutions and Network units, which includes wireless LAN gear, public safety communications equipment, and service-provider networks. This will effectively serve as Motorola’s enterprise division, which requires a lot more integration work in a different way than its home division does, one of Motorola’s claimed reasons for the split.
The split into these two companies will be made through a tax-free stock dividend of shares to its current shareholders. Motorola made a profit of $0.03 per share in the first quarter of 2010 by selling shares worth a total of $5 billion, but the company has been struggling during the recession and due to strong rivaly in the smartphone market by the likes of Apple, HTC, RIM, and Nokia.
It forecasts growth in sales of its mobile phones by the end of the year, but it is likely that the division into two companies is aimed at giving its Mobility division a new focus that will aid its faltering sales in the mobile market.
TechEye had a quick chat to Ross Rubin, analyst at NPD Group, who told us when it comes to performance checking, it’ll have the edge over rivals like Nokia and RIM: “The division of Motorola will make it easier for investors to evaluate the company in the core wireless business, which has different dynamics than the cable industry serves by the rest of Motorola. It can judge its performance more easily vs. companies such as Nokia and RIM.”