Enterprise mobility, and the solutions they provide are not necessarily compatible across the need level ecosystem, at least according to Motorola management.
About eighteen months ago, Motorola felt that purchasing a mobility Auto ID company, like industry leader Symbol Technologies, would bring along a synergy to their business model that few cellphone/radio communications companies in the world would have. Most analysts agreed to the proposition that the small form factor manufacturing commonality, combined with the different and unique focus in non-conflicting markets could be a strong asset going forward.
If this concept was ever true, Motorola blew it. If the concept wasn’t true, a lot of the misunderstanding to corporate culture in niche markets and the ability to remain relevant in an evolving WEB 2.0 world may have been the culprits.
Motorola handsets to be made a stand alone business unit. Image Credit: Motorola.com
This excerpted from CNET -
Motorola hits redial on handset biz
Posted by Marguerite Reardon, CNET News.com March 26, 2008 7:37 AM PDT
Motorola is hoping two is better than one.
On Wednesday, the company, whose cell phone business has been in a death spiral for several quarters, announced that after a two-month formal analysis, it has decided to split the company into two publicly traded entities.
One will handle handsets and accessories while the other will continue to concentrate on wireless broadband and enterprise communication products.
"Creating two industry-leading companies will provide improved flexibility, more tailored capital structures, and increased management focus--as well as more targeted investment opportunities for our shareholders," CEO Greg Brown said in a release.
The Mobile Devices business will handle the designs, manufacturing, and sales of mobile handsets and accessories, and will license a portfolio of intellectual property.
The Broadband & Mobility Solutions business will handle service voice and data communication solutions and wireless broadband networks for enterprises and governments. It will also handle IP video, cellular, and high-speed broadband network infrastructure, and cable set-top receivers.
Investor Carl Icahn has been pressuring the company to separate out its mobile phone business, and has been engaged in a protracted legal struggle with the company regarding its future. Motorola offered up two board seats to Icahn this week, but the activist investor rejected the offer. Brown declined to comment on how this latest news will impact discussions with Icahn's camp.
But many questions linger. For one, how will spinning off the business unit actually help the company get back on track? And then there is the question of brand. Motorola has an 80-year history as a communications provider. The company practically invented the cell phone industry in the 1980s. So what will it do with a brand it has spent billions of dollars and decades creating?
Brown gave vague answers to these questions during the conference call. He reasoned that splitting Motorola into two separate companies will allow management teams to focus and tailor their financials to the needs of those businesses.
But even though it's easy to see how Motorola's other businesses might benefit from the separation, it's still a bit unclear what will really be different in the handset division. The company's problem is that it isn't making products people want to buy.
Brown acknowledged that new products are key to turning around the handset business. But he said the division needs to be separated to help attract new, top-level talent to lead the recovery. Brown is currently searching for a new CEO to head up the new company.
"The Motorola brand is strong and trusted and proven," he said. "It's valuable to mobile devices as well as other assets in parts of the business. We will refine the brand strategy in next several months going forward."
But Forrester's Daley believes that keeping the brand with the handset division really is the only viable option the company has.
"Good or bad--Motorola's brand is for mobile devices," she said. "The broadband and mobility solutions unit will have to grow and separate their brand/value from the consumer-device company."
So the name change from Symbol Technologies to Motorola really hasn’t helped ... Symbol Technologies already had great brand/value as an enterprise mobility solutions provider and NOW it has lost its "good" name - in only 14 months after Motorola's purchase.
Motorola enterprize mobility solutions (Symbol Technologies) to be made a stand alone business unit after only 14 months. Image Credit: Motorola.com
And this view excerpted from InfoWorld –
Update: Motorola to split in two
Reorganization mirrors moves Nokia, Ericsson have made
By Mikael Ricknäs, IDG News Service / InfoWorld March 26, 2008
"Everyone agrees Motorola had to do something, the split will relieve some of the pressure from stockholders," said Ben Wood, director of research at CCS Insight, who at first glance thinks the split makes sense.
"The mobile phone division has taken a bit of a beating, and this is what you get," said Richard Webb, directing analyst, WiMax, Wi-Fi, and Mobile Devices at Infonetics Research.
The split will provide improved flexibility, more tailored capital structures, and increased management focus -- as well as more targeted investment opportunities for shareholders, according to Greg Brown, Motorola's president and chief executive officer.
Analysts agree the split will bring improved focus, especially for the mobile phone company.
"[The mobile phone part] won't have to take the infrastructure side into consideration, and the split may also help raise its profile," said Webb.
But that can also be a bad thing. It was in part because of handsets that Sprint dared to make its big gamble on WiMax, which has proved problematic.
In the end, the mobile phone business needs a healthy and competitive Motorola, according to Wood.
"It's needed to provide some balance with Nokia. A Nokia-Samsung duopoly isn't good for anyone," he said.