CHICAGO, Oct 3 (Reuter) - Motorola Inc said Friday it is reviewing its modem business, or portions of it, as one of the telecommunications giant's units not meeting expectations.
"The company is reviewing programs and businesses that have not lived up to expectations and that does include the modem business or portions of the modem business," said Shannon Clemons, spokeswoman for the Schaumburg, Ill.-based company's transmission products division in Huntsville, Ala.
"The modem business is one of the businesses under review," Clemons told Reuters.
Motorola has been involved in the hotly competitive modem market since 1978, but analysts said it has never become a market leader and may be planning a retreat as new chief executive Christopher Galvin refocuses corporate efforts.
"I don't think it's been a very profitable business for them. With the new CEO in there, they're looking at all aspects of their operations," said Lawrence Borgman, an industry analyst at Josephthal Lyons & Ross.
The modems business is dominated by 3Com Corp's (NASDAQ:COMS) recently acquired U.S. Robotics unit, and Lucent Technologies (NYSE:LU), the high-tech spin-off of AT&T Corp (NYSE:T).
Modems generate only a small portion of Motorola's $28 billion in annual revenue, analysts said.
"When it comes to computer modems, we're talking about the Lucent and the USRobotics technologies. Motorola's just in there trying to get a place ... There's some value to the business. But is it central? Is it core? I don't really think it is," said Charles DiSanza, industry analyst at Gerard Klauer Mattison.
Clemons, the company spokeswoman, declined to comment on a report that Motorola has hired Goldman Sachs to solicit buyers for the consumer analog modem business.
Motorola manufactures the SURFR line of modems, including modem cards for laptop computers, modem lines for desktop computers and corporate modems. Modems are devices that allow computers to communicate over telephone lines.
Motorola is scheduled to report quarterly financial results on Monday. Shares in the company were up 2-3/4 to 72-1/2 in midday New York Stock Exchange trading Friday. |
