Motorola exploring future options for its Mobile Device business
Published by Rafe Blandford at 11:22 UTC, February 1st 2008
Late yesterday Motorola announced that it was considering a 'structural and strategic realignment of its business to enhance shareholder value'. Motorola is exploring its options in order 'to better equip its Mobile Devices business business to recapture global market leadership'. The company is considering spinning off or selling its Mobile Device division, but no final decision has been made and the mobile phone division may yet be retained.
The news, while dramatic, will not have only limited immediate impact. Motorola's Mobile Device division will continue to operate as normal and we can expect to hear about some of its latest development at MWC in 10 days time. Furthermore, given Motorola's recent performance, it is inevitable that a strategy rethink and or realignment, in whatever form it might take, was inevitable.
Motorola's Mobile Device division makes up about 50% of Motorola's total sales of $36 billion. However the division has been performing poorly recently with its market share declining by half to 12% from its peak in 2006. The major problem has been an inability to compete at either the high end or low end of the market in many markets. It has lost out to Nokia in the very low cost handset segment that dominates emerging markets and has failed to create an effective competitor to Nokia's Nseries and multimedia handsets in Europe.
Motorola's recent purchase of a 50% stake in UIQ offers a very real solution to its woes in the high end multimedia phone space. Motorola's Z8 and Z10 devices, powered by UIQ, have been favourably received and further Motorola UIQ handsets are expected to be announced this year. However it is to early to assess any impact this may have in the longer term and has to be set against a background of a company with a multiple software platform strategy.
Categories: Industry, Editorial Thoughts
Platforms: General, UIQ 3
News Discussion
I can't imagine they really want to sell off their handset business as it is their most profitable sector, however it is desperately over-due for a shakeup.
The statement seems slightly unclear, and they do actually say they haven't made up their mind yet.
I think the most likely would be spinning it off rather than selling. But as krisse said Freescale was later sold IIRC.
Of course there's no guarantees - it seems likely something will happen, but it could still stay within Motorola.
When Sony and Ericsson had problems selling enough phones, they both spun off their phone divisions and merged them into Sony Ericsson, which is jointly owned by Sony and Ericsson. The parent companies are still separate, but they've pooled their resources as far as phone making is concerned.
Perhaps Motorola is looking for another smaller phone maker to partner with?
Could we be about to see Motorola-LG? Motorola-Lenovo? Motorola-BenQ? Motorola-Samsung? Or even the unlikely Motorola-Sony-Ericsson?
If you wanted to get conspiracy theorist about this, you could point out that Moto recently entered into a joint venture with Sony Ericsson called UIQ, although that only covers smartphone interfaces, not actual phones.
Three other companies (Samsung, LG, and SE) appear to be doing well enough without Motorola's participation. Any of them may be willing to buy Motorola's business (if only to get a brand and remove a rival), but a partnership appears unlikely.
However, if we wanted to speculate on a partnership, both Lenovo and BenQ do actually make handsets under their own brand as well as for order. Perhaps Moto would be a good partner for getting their brand known in the West (if the phones were called Moto-BenQ or whatever)?
Lenovo has just announced that it is selling its mobile business - http://www.shanghaidaily.com/sp/arti...cle_347514.htm
ttfn
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Originally Posted by krisse
both Lenovo and BenQ do actually make handsets under their own brand as well as for order.
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| Lenovo has just announced that it is selling its mobile business |
| These guys can produce all right. They can significantly cut costs. They just can't design a decent product that stands out. |