Motorola said it’s considering spinning off its mobile phone unit, saying it’s looking into “structural and strategic realignment.” The U.S.-based handset maker has been struggling over the past year to regain profitability and losing market share to many of its rivals.
Analysts have speculated that possible candidates to purchase the struggling handset unit include rivals Samsung, Sony Ericsson or even Chinese vendors Huawei or ZTE.
Some analysts insisted that selling off the handset business wouldn’t make long-term sense for investors; Motorola’s handset revenues dropped by one-third during the last year and mobile phones still accounted for over half of the company’s total sales.
Activist investor Carl Icahn, who owns a 3.3% stake in the company, has called for the company to spin off its handset unit to increase value for its shareholders. “For many months I have been publicly advocating the separation of Mobile Devices from Motorola’s other business and I am pleased to see that Motorola is finally exploring that proposal,” Icahn said in a statement.
Motorola has done some strategic realigning over the past year, ousting its CEO and redistributing resources amid three business segments. The company’s TV set-top box and network equipment unit saw a 9% increase during the last year and its enterprise mobility unit, which sells wireless products to corporate clients, reported sales jumping 43%.
Filed Under: Carriers
