Motorola makes the call to split

Amy Scott Mar 26, 2008

TEXT OF STORY

Renita Jablonski: Motorola has announced plans to spin off its ailing mobile phone handset business. The move will create two separate publicly-traded companies. Marketplace’s Amy Scott has more.


Amy Scott: Motorola will separate its mobile devices unit from broadband and other products. Last year, the company lost its number two spot in the handset business to Samsung after it failed to recreate the success of its popular Razr phone.

In a conference call this morning with analysts, CEO Greg Brown said the split would give each company more flexibility, and more attention from management.

Greg Brown: I believe strongly with these efforts, along with our brand, our people, and our intellectual property, mobile devices will be well-positioned to regain a leadership position as a focused, independent company.

It’s not clear if the move will silence frustrated investors, who’ve watched Motorola’s stock price plunge as it’s lost market share.

This week, one of those investors, Carl Icahn, sued the company. He wants Motorola to hand over documents related to the board’s handling of the mobile devices business. When asked this morning if Icahn’s camp had been consulted about the spin-off, Brown declined to answer.

In New York, I’m Amy Scott for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.