Motorola, the 82-year-old consumer electronics pioneer responsible for early televisions, mobile phones and even the first broadcast from the moon, has split into two companies in a reflection of changing markets.
As separate companies – Mobility (targeting consumers) and Solutions (for professionals) – the two will have simpler stories to tell investors and a nimbler approach to developing cutting-edge products such as tablet computers.
Sanjay Jha, CEO of the consumer-focused Motorola Mobility Holdings Inc, said in an interview that the new company would benefit from a narrower focus, all the way up to the top management and the board of directors.
“I think you’ll see a board that is much more focused on understanding technology as opposed to managing a portfolio of products,” Jha said.
For decades, Motorola Inc’s products told the story of the march of electronics into the hands of consumers: car radios in the 1930s, TVs in the 1940s and mobile phones starting the 1980s.
The company also expanded into police radios and barcode scanners aimed at government agencies and large businesses.
These divisions complicated the picture Motorola painted for investors; now, they make up the second company, Motorola Solutions Inc.
With the breakup, which was made official on Tuesday, comes a shrunken bureaucracy, which both companies hope will help them make faster decisions and compete better in the marketplace.
“Motorola (Mobility) can be focused on handsets and nothing but handsets in a world where so much as changed over the last five years is good thing,” said Gartner analyst Michael Gartenberg.
Likewise, Solutions doesn’t have to worry about the once-flailing mobile phone business.
“Hopefully this will lead to more innovative designs, better time to markets and a better ability to not just capitalise on trends but also create trends,” he said.
Dan Maloney, Mobility’s president, also said a smaller company that excels at just a few things might spur employees to be more creative.
“Inside Motorola, it was difficult at times for employees to understand how what they were doing was going to directly have an impact on financial performance because it was such a large, multi-faceted entity,” he said.
Shares of Motorola Mobility Holdings Inc climbed $US2.88, or 9.5 per cent, to close at $US33.12 on Tuesday.
Motorola Solutions Inc’s stock closed unchanged at $US39.77. The shares were trading on the New York Stock Exchange with the ticker symbols MMI and MSI, respectively.