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Daily Brew: 10 Principles of Effecti...   Microsoft + Yahoo = Microhoo?
Jan 31 2008 11:02PM EST

So Who Is Motorola Anyway?

As an earlier post noted, Motorola is thinking about exiting the cell phone business -- a move that would be in keeping with the company's history.

On Thursday evening, Moto executives confirmed that the company is in fact looking at all kinds of options, including but not limited to selling the cell phone division. All of this is basically a reaction to a combination of a crisis in the cell phone division -- it's not thrilling the market with new models and sales are diving -- and a new challenge from Carl Icahn.

There is something different from the past, though: It's hard to know which piece of Motorola is actually Motorola. I mean, the cell phone handset division had about $19 billion in revenues in 2007, or more than half the company. The rest of the company makes things like wireless network equipment and set-top boxes -- hugely unsexy businesses that, unlike the cell phone unit, now make a profit. Motorola has ALWAYS first and foremost been a consumer electronics company. So if it splits cell phones from the other, industrial businesses -- which one would actually be Motorola?

Clearly, the company has to do something. It increasingly can't compete with Nokia, Samsung, LG and, for that matter, Apple. Its Q has never caught on as a Treo or Blackberry type of option. Its ROCKR has never caught on as a music phone. And RAZR is old hat. If Moto doesn't have the kind of consumer design culture that can crank out hit after hit, maybe it does need to hand the handset business to someone else.

No wonder Ed Zander got out when he could.

motoQ.jpg

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