Economy

Motorola Splitting Into Two Companies

Electronics pioneer Motorola Inc. will divide itself into two newly independent companies on January 4, 2011, becoming Motorola Mobility and Motorola Solutions. The former will focus on consumer-facing products such as cell phones and the latter will focus on government and corporate customers buying products such as police radios and barcode scanners.

According to the AP:

The breakup is motivated by the desire to present two simple stories to investors, rather than one complicated one.

Motorola set the breakup plan in motion in 2008 after prodding from activist investor Carl Icahn. The goal was to complete the separation by 2009, but the economic downturn and the continuing collapse of Motorola's phone sales prompted it to postpone the plan. Motorola announced the new date Tuesday.

The Wall Street Journal's report on the split notes that Motorola's Android-based phone strategy looks like it's working:

In October, Motorola reported its third-quarter profit soared as it sped the release of new smartphones using Google Inc.'s Android software. Motorola has bet heavily that its lineup of Android devices would rejuvenate its flagging mobile devices business—a move that is starting to pay off.

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