Motorola Eyes Breakup of Company to Gain Telecom 'Leadership'

Company said it is 'exploring the structural and strategic realignment of its businesses.'

Motorola said on Jan. 31 it is studying a possible breakup of the company in an effort "to recapture global market leadership" in the mobile phone market, and to enhance shareholder value. The struggling company based in Schaumburg, Ill., said it is "exploring the structural and strategic realignment of its businesses." This may include the separation of its Mobile Devices division from its other businesses "in order to permit each business to grow and better serve its customers," the company said.

Motorola, once the world's second-largest mobile phone maker, after Nokia Corp. of Finland, has since lost its place to South Korean rival Samsung Electronics Corp. amid fierce global competition and watched earnings slide. The company lost $49 million in 2007, swinging to a deficit after a profit of $3.6 billion in 2006 as its problems worsened in the tough market for mobile devices.

Motorola also makes digital set-tops for televisions, cable modems, and markets technology services to consumers and government.

"All of our businesses have exceptional people, products and intellectual property and the ability to achieve category leadership in their markets," said Greg Brown, president and chief executive, who took the job January 1 after Ed Zander stepped down. "We are exploring ways in which our Mobile Devices Business can accelerate its recovery and retain and attract talent while enabling our shareholders to realize the value of this great franchise."

The company said it would not discuss details of any plan until its board has approved a deal

Copyright Agence France-Presse, 2008

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