Motorola announces split into two companies


Motorola Inc announced today that it plans to split into two separate companies. The first company will focus on handsets and associated accessories while the other will focus on broadband and mobility solutions (including network equipment and two-way radios for example). The breakup is expected to be completed in 2009. The decision comes after a strategic review announced earlier this year.

Motorola expects that the decision will give the two new companies more flexibility, increase management focus and provide better returns for shareholders (including billionaire investor Carl Icahn) who have been pressuring the company to move in this direction for a while now.

The success of the original RAZR is now in the past and Motorola’s handset business has been in considerable trouble after losing both marketshare (shipments dropped 38 percent in the fourth quarter of 2007) and money in the recent past.

Motorola also announced that it was looking for a new leader for the beleaguered division.

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