Struggling technology company Motorola said Thursday it plans to split in two in early 2011 — with one half containing its consumer-focused mobile phone and television set-top box products, and the other holding divisions that target business customers.
The split will give current shareholders a share in each new company, which will be roughly the same size in terms of annual revenue at $11 billion. Both halves will be publicly traded.
The move gives the company's two co-CEOs, Sanjay Jha and Greg Brown, separate companies to run. Jha will concentrate on Motorola's entertainment and consumer-oriented devices, including smartphones like the Droid, and Brown on high-tech business solutions.
"We believe this configuration is cleaner and more compelling for customers and investors," Brown said in an interview. "We do anticipate that both business segments will have positive operating cash flow moving forward."
The move is a change from plans the company announced in late 2008 to spin off only its handset unit by the third quarter of 2009. It put that plan on hold as the recession deepened and sales deteriorated.
Motorola, based in Schaumburg, Ill., rode high for a few years after introducing the wildly popular Razr flip phone in 2005, but as the phone's popularity faltered, the company struggled to develop a worthy successor, and losses piled up in its cell phone division.
Two newer phones based on Google Inc.'s
Android operating system, the Cliq and the Droid, have been well-received, and Motorola said it shipped 2 million units in the fourth quarter. Motorola's Android-based Devour will go on sale in March through Verizon Wireless.
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