Motorola, maker of the first cellular phone in 1983, is going ahead with its 2009 plan of splitting the company into two publicly traded companies and said yesterday that it has targeted to do so in the first quarter of 2011.

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, will split the company into two by combining its mobile devices division with the cable set-top box business as one company, and combining its enterprise mobility solutions and networks businesses, as the other.

Dr Sanjay Jha

Qualcomm veteran, Dr Sanjay Jha, hired by Motorola as a co-CEO in August last year, (See: Motorola poaches Qualcomm CFO to head loss-making handset division) and one of Motorola's two co-chief executives, will be the chief executive officer of Motorola's mobile devices and home businesses, with immediate effect.

The other co-chief executive officer of Motorola, Greg Brown, will be the CEO of Motorola's enterprise mobility solutions and networks businesses, effective immediately.

The Schaumburg, Illinois-based Motorola had announced plans in 2008 of splitting the phone unit from the rest of the company by the third quarter of 2009, (See: Motorola explores three-way split) but was forced to put the plan on hold since all its three major divisions, mobile devices, enterprise mobility, and home and networks mobility, were struggling and running into huge losses with the onset of recession. (See: Motorola skips dividend amid $3.6 billion loss)

Facing intense competition from Cisco System, Hewlett-Packard and others, Motorola was seeking at that time to sell its most profitable home and networks mobility division, which makes television set-top boxes and networking gear, but failed to attract a buyer who would pay around $4 billion to $5 billion that it was expecting.

Motorola intends to effect the split into two companies, each of which accounted for roughly half of Motorola's $22 billion in sales in 2009, through a tax-free stock dividend of shares in the new company to Motorola 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.

Motorola said that following the separation, both businesses would be well capitalised to enable the companies to execute their respective business plans and be able to address future opportunities.

The mobile devices and home businesses that Dr Jha will be overlooking will comprise a comprehensive portfolio of mobile converged devices, digital entertainment devices in the home, and end-to-end video, voice and data solutions. Working with network operator partners, the company will also enable more advanced personalised services that leverage the capability of expanding wireless and wireline broadband availability.

Dr Jha said, ''The combination of mobile devices and our home business brings together two highly complementary and innovative organisations. Together we will be best positioned to lead in the convergence of mobility, media, and the internet. Our expanding portfolio of smartphones and end-to-end video content delivery capabilities will enable us to provide advanced mobile media solutions and multi-screen experiences for our customers."

Brown, who will be overseeing Motorola's enterprise mobility solutions and networks businesses, which comprises of end-to-end portfolio of products and solutions, including rugged two-way radios, mobile computers, secure public safety systems, scanning, RFID, and wireless network infrastructure.

Brown said, ''We are the leading mission-and business-critical technology solutions provider with a commitment to innovation. As an independent company, we will continue to build on our long-standing tradition of strong customer relationships, leading-edge product development, quality, thought leadership, and solid financial performance.''

Motorola, which introduced the world's first two-way pager and first large-screen transistorised, cordless portable television set, has seen its flagship wireless device business come under attack by a combination of the economic slowdown as well as blistering competition from rivals and did not have a winning product since the introduction of the popular RAZR six years ago.

Last year the company introduced two Android phones based on Google's Android operating system by launching the long-awaited smartphones - the Droid and the Cliq, with the Droid, though turning out to be a winner for Motorola, has not exactly been an iPhone killer.
Motorola tied up with Verizon Wireless, a joint venture between Vodafone Plc and Verizon Communications to sell the Droid with Verizon backing sales with one of its largest marketing campaigns ever.

Last July, Dr Jha along with Brown managed to turn the loss making company around within a year of  initiating aggressive cost cutting measures, setting the stage for a comeback in the highly competitive smart phone market, with a dramatic second quarter recovery, posting a modest $26 million profit, signalling the worst was over for the telecommunications equipment maker after several quarter losses. (See: Motorola bounces back with $26 million Q2 profit)

In 2009, the company generated $22 billion in sales, of which, mobile devices accounted for $7 billion, home and networks accounted for $8 billion and enterprise mobility $7 billion.