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Motorola Announces Separation into Two Independent, Publicly Traded Companies

Motorola, Inc. announced yesterday, February 11, that they are targeting the first quarter of 2011 for its planned separation into two independent, publicly traded companies. One company will consist of Enterprise Mobility Solutions and Networks businesses, which cover rugged two-way radios, mobile computers, secure public safety systems, scanning, RFID, and wireless network infrastructure. The other company will consist of Mobile Devices and Home businesses, which includes mobile converged devices, digital entertainment devices in the home, and end-to-end video, voice and data solutions.

Greg Brown, co-chief executive officer of Motorola, Inc., will serve as chief executive officer of Motorola’s Enterprise Mobility Solutions and Networks businesses. Mr. Brown said, “We are the leading mission-and business-critical technology solutions provider with a commitment to innovation.  As an independent company, we will continue to build on our long-standing tradition of strong customer relationships, leading-edge product development, quality, thought leadership, and solid financial performance.”

Dr. Sanjay Jha, co-chief executive officer of Motorola, Inc., will serve as chief executive officer of Motorola’s Mobile Devices and Home businesses. Dr. Jha said, “The combination of Mobile Devices and our Home business brings together two highly complementary and innovative organizations. Together we will be best positioned to lead in the convergence of mobility, media, and the Internet.  Our expanding portfolio of smartphones and end-to-end video content delivery capabilities will enable us to provide advanced mobile media solutions and multi-screen experiences for our customers.”

Following the separation event both entities will use the Motorola brand. The Mobile Devices and Home business is expected to own the Motorola brand and license it royalty free to the Enterprise Mobility Solutions and Networks business.

According to a NY Times article, “People briefed on the matter have said that Motorola also planned to sell its wireless networking division after the spinoff…A sale of the wireless networking unit could fetch more than $1 billion.” If Motorola sells off its wireless networking division, it could have a big effect on one of the major value-adds they offer for mobile devices. This selling point that Motorola and their partners convey to customers is that Motorola wireless network devices have a “special sauce” that optimizes the performance of Motorola mobile computers. Would that compatibility remain the same if the manufacturing of the wireless network devices were controlled by another company?

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