Motorola explores three-way split

13 Nov 2009

1

Motorola, maker of the first cellular phone in 1983, is exploring the possibility of splitting itself into three listed companies and selling its home and networks mobility unit to repay debt.

Motorola has three major divisions, mobile devices, enterprise mobility, and home and networks mobility, all of which are struggling.

The once undisputed technology giant, which enabled Neil Armstrong's famous words: ''one small step for a man, one giant leap for mankind" to be communicated from the Moon on a Motorola radio, is in talks to sell its its most profitable division, home and networks mobility division, which makes television set-top boxes and networking gear.

Facing intense competition from Cisco System, Hewlett-Packard and others, Schaumburg, Illinois-based Motorola is seeking to sell its most profitable division, which could fetch $4 billion to $5 billion, The Wall Street Journal reported.

The set-top-box division, which accounts for about a third of revenue, was transformed into a performance-driven company in September 1999 after Motorola acquired the then No.1 cable TV equipment maker, General Instrument in an $11-billion stock swap deal.

The division had sales of $10.1 billion last year, and its net revenue of $2 billion in the third quarter was down 15.3 per cent from a year ago. Profit fell 24 per cent to $199 million, down 24.3 per cent from a year ago for the same quarter.

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