from the WSJ. Question is which Motorola will prevail as the future Motorola -- the handset business or the profitable businesses?
Motorola Reorganizes
Home, Networks Unit
By SARA SILVER
July 28, 2008
Motorola Inc. is reorganizing its second-largest business unit, home and networks mobility, into three distinct businesses, a step that could make it easier for Motorola to sell some of the businesses in the future.
The changes, outlined in a memo to employees last week, come ahead of Motorola's quarterly report on Thursday. The Illinois-based telecom-equipment maker is expected to report on plans to split itself into two companies, separating its troubled cellphone unit from the rest of Motorola, the home and networks mobility unit and its public-safety radios division.
Home and networks mobility, with revenue of $2.4 billion in the first quarter, supplies telecom carriers and cable companies with the equipment to provide voice, broadband and TV services. Until now it had been organized as an array of businesses, making cable set-top boxes, modems, cable infrastructure and network gear to carry voice and data signals.
The reorganization aligns these businesses into three distinct units. One unit will include the cable set-top boxes operation as well as other equipment for digital video, Internet-based video and modems. It will be led by John Burke, who currently oversees the cable set-top business, the world's largest by sales.
The company's networks-gear business will be divided in two. One unit, cellular networks, will focus on traditional wireless equipment sold to telecom carriers and be led by Fred Wright. The other, broadband access solutions, will focus on next-generation technologies including WiMax and LTE, which have so far produced little revenue. This unit will be led by Dan Moloney, head of home and networks mobility, until a permanent leader is announced.
Dan Coombes, who was senior vice president for wireless broadband systems, will become an adviser to Mr. Moloney.
Coming at a time when Motorola is contemplating various restructuring options for the entire company, the reorganization could pave the way for Motorola to keep the cellphone business and spin off or sell other pieces, one analyst said. "This opens the way for a reverse spinoff, in which everything but the handset business is sold," said Ittai Kidron, analyst at Oppenheimer Inc.
The memo to employees noted that "these changes are not a reaction to Motorola's separation plans or a cost-cutting measure." The memo said "it's time to position our business for continued success over the next five years."
A Motorola spokeswoman said the reorganization "will ensure that Home & Networks Mobility remains agile, focused and ideally aligned to realize its growth potential." |
