By It wasn’t long ago we were talking about Motorola selling their handset division or maybe even just burning it and scattering the ashes since everyone had negative things to say about it. Well rather than get blown into billions of bits, Motorola is getting chopped in half, with mobile handset business and TV set-top box business in unit and their wireless networking business as a separate unit. The goal is for the newly formed entities to be more focused and nimble.
The two new companies are just about equal in terms of revenue with a combined $22 billion in sales in 2009 – each earning half. But revenue and profit are two very different things. I’m sure this new setup will improve business operations but I think it pales in comparison to the REAL game changer here… Motorola making products that people actually want.
In the New York Times article announcing this information I found the following detail rather crazy:
“people briefed on the matter have said that Motorola also planned to sell its wireless networking division after the spinoff. Last year, Motorola had begun seeking a buyer for its set-top box and wireless networking units”
Does that mean Motorola was trying to sell EVERYTHING? When did they go from trying to sell their handset division only to trying to keep their handset division only? Maybe when… they started making Android Phones that absolutely rocked? Yeah, probably.
whats the idea of splitting???
DROID.
“equal in terms of revenue with a combined $22 billion in sales in 2009 – each earning half. But revenue and profit are two very different things”
one is much less profitable then the other and also a lot more risky. i think by splitting u minimize the overall risk because u can let one of the half go bankrupt without the other part suffering from it. also “I’m sure this new setup will improve business operations” each part can establish different ways of operation, most suited for the type of business, rather then both sharing the same way which will have more negative effects for each.
ohya also, by splitting u create an immediate “uprise” in one of the companies, because of the profitability increase and or prospect for future expansion, u will most likely be able to gain more shareholders and thus actually expand even more.
Rob, regarding your statement here: “Does that mean Motorola was trying to sell EVERYTHING? When did they go from trying to sell their handset division only to trying to keep their handset division only? Maybe when… they started making Android Phones that absolutely rocked? Yeah, probably.”
You’re 100% correct. In fact, MOT stated as much about three weeks ago. That due to sales they were seeing in their handset division (i.e. boffo Android sales) they were rethinking their break-up strategy completely.
I’ll still never understand how the Street blew off the fact that they sold 2 million Android phones in 2 months as reported in their 4th quarter report.
Save an electronics company?
Droid does.
Your analysis is a little flawed. The mobile devices division has been bleeding money for some years now, and the rest of the company has always made good money. They just couldn’t offload the mobile devices until it was at least coming out even.