Motorola May Spin Off Mobile Devices Unit: iPhone’s First Casualty?
Duncan Riley
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Motorola is exploring spinning off its mobile devices unit “to recapture global market leadership and to enhance shareholder value.”
The move comes in an ever increasingly tight market which has seen Apple capture 19.5% of the smartphone market in its first twelve months, a new iPhone style device announced by GPS provider Garmin, and a slew of Android powered phones coming later this year, including at least one mobile phone from computer maker Dell.
Motorola’s mobile phone market share has continued to slide in the face of existing competition with the handset unit recording a $1.2 billion loss in the 4th quarter of 2007.
Although mobile phones are still perhaps the public face of Motorola, the company is also an enterprise provider of communications tools to business, Government and the military.
We’re placing Motorola’s handset unit on Deadpool watch. Motorola has had a mixed track record of spinning off companies, having success with Freescale Semiconductor, however Iridium saw what was once the worlds leading commercial satellite network file for bankruptcy in 1999. A new company based around a business unit with a $1.2 billion loss is going to take some serious work in turning around under normal circumstances, but in a market that will see a slew of new competitors and where a new comer such as Apple can take such a big slice of the market in such a short time, it will be harder again, if not near on impossible.
