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Motorola May Exit Cell Phones; Contemplates Sell-Off

Moto Thursday night confirmed rumors that it might pull out of cell phones, the now-ubiquitous device that it invented
By Maureen O'Gara
Article Rating:
February 1, 2008 02:45 PM EST
Reads:
 6,630
Motorola Thursday night confirmed rumors that it might pull out of cell phones, the now-ubiquitous device that it invented. It put out a statement saying it was “exploring the structural and strategic realignment of its business” and that its alternatives include “the separation of mobile devices from its other business.” Motorola’s sales of mobiles were down 38% in Q4 and company profits down 84% from $523 million to $111 million.

Back in November when Motorola CEO Ed Zander threw in the towel we observed that since Eddie had led Sun into the valley of the shadow of death five years ago it had never recovered and predicted that there was a pretty good chance the same thing could happen to Moto.

It appears it has.

Motorola has a track record of exiting core business. Before our time – well, most of us anyway, it exited radios and televisions. But who exactly is going to buy a dying business that can’t replace the short-term glory of the RAZR and what exactly it expects to fall back on at this point is unclear – set-top boxes? Telecom network gear?

Phones are still half the company’s business; it fancies that restructuring will accelerate the unit’s recovery and hold and attract talent.

Meanwhile, in the background activist shareholder Carl Icahn and his 3.3% stake is preparing for a proxy fight for seats on Moto’s board. Icahn has been pushing for a spin-off claiming it will unlock $20 billion in value. He lost a proxy fight last spring.

Published February 1, 2008 – Reads 6,630
Copyright © 2008 SYS-CON Media, Inc. — All Rights Reserved.
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More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025.

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