Motorola could combine handsets and set-top boxes for spin-off
Published: 11 February, 2010
READ MORE: M&A | US | Motorola | Handset
As ALU tries to make sense of its merger at last, one of its rivals, Motorola Networks, is considering a break-up. This is an ongoing saga of course. Motorola planned to spin off the handset business, but put that on hold in 2008 when the credit crunch struck. At the turn of the year it was reported to be in talks to sell its Home and Networks Mobility division, either whole or in its main parts (chiefly set-top boxes and wireless infrastructure). Now, The Wall Street Journal says the latest plan is to spin off handsets and set-top boxes together, leaving the networks infrastructure business and the enterprise networks division.
The report says that the change of heart has come in the past few days, and involves merging the two user equipment businesses into a single, new, public traded company. These two units combined had sales of about $11bn last year, around 50% of the group total. The idea would then be to sell off the rest of the networks company as planned, which could be easier without the distraction of the somewhat lateral set-top boxes unit.
The idea of combining handsets and STBs goes back to the thinking at Motorola a few years ago, before crisis hit its cellphone business and distracted the firm from anything but firefighting. There was much talk of a common platform, incorporating phones, television, and other emerging devices, all supporting a unified content experience. This idea is far more mainstream now, with most large vendors targeting a 'three screen' or 'four screen' policy to deliver content and apps to multiple systems. According to The New York Times, Motorola is thinking it could create a company to span the range on the hardware side, giving it much needed differentiation from other phonemakers (though Samsung and Sony could throw more gadgets at the problem if they could get their various divisions to work in a unified way).
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