Motorola’s Spin-off

Posted by | March 27, 2008 | blog, Technology | No Comments

It is time to take a peek into the happenings of the major companies. As you all know I have been posting on some of the companies which have made difference to technology. One such company which has a great brand name but yet is falling into troubled water is what we would be talking about. Any guesses, well it is Motorola.

Motorola has not been having a great year, infact the loss value for the company is around 60% for one year. This has led the management’s decision to split the company into two for better management and administration, the proposed split is to be completed by the year 2009. The company would be split into two sections, one taking care of the Mobile Phone Device and the other of Networking and Set top boxes for television. Now let us observe the possible outcome of such a ‘spin-off’s’ as per some analyst reported in ‘Reuters’.

Some are of the view that the split would help the company to attract possible mergers or even prominent investors; it would also enhance the recovery of the mobile devices (as there are no breakthroughs after the much celebrated ‘razr’ phones). On the other side many feel that this split would discourage many of the top engineers and other professionals in the company from continuing and in the process might loose on its human asset. Even Brown (CEO of Motorola) has not clearly defined as to how Motorola’s 66,000 employees would be split between the companies.

The split as I envision is a slow and a difficult process, during which time Motorola might loose some of its engineers and other employees, but after the split it would be much easier to restructure both the companies and work on lines of strategic improvements. Motorola still enjoys a great brand name and I agree when analyst say that the Mobile device unit should utilize Motorola’s brand image.

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