Motorola is about to undergo a major change in company structure, splitting itself in two parts. One part will concentrate on mobile devices like their large line of phones, and the other will concentrate on network infrastructure. This should toss the company into upheaval for months, not matter how well planned it is. This could have the most impact on the cell phone market.

A distracted Motorola means that competing companies might have a chance to get their foot further into the mobile market. It is also a move with interesting timing. Doing this now suggest that Motorola may be readying itself to ride the wave of the newly “open” 700mhz spectrum on the coat tails of Verizon Wireless. Since doing so would require a major investment into new technology and a firm grasp of Verizon’s CDMA standard, the split might give them a chance to focus on that, if that is their goal.

All speculation aside, the split will only help Motorola’s struggling mobile device division improve its bottom line. It has faltered of late in the face of stiff competition and a crowded market. It is necessary that Motorola improve quickly to remain able to compete against Nokia/Seimens and Sony/Ericsson. You don’t want only two choices in phone manufacturers, and while phones like the Casio G/Zone are cool, they are often limited to one network or made by companies not normally thought of as mobile device companies.

The split is scheduled to be complete in 2009. It is a tax free stock distribution deal to existing shareholders. Current Motorola shareholders will then hold shares of both companies without needing to do anything further – the split will be automatic on their end. Motorola is not the first company to change structure – both Nokia and Sony merged with other companies recently to improve their standing in the mobile market.

Source

Related:

Entry was posted on Wednesday, March 26th, 2008 at 6:00 pm under Cell phones.

Read more entries by Leslie Poston.
Stumble It!