Analysts See Problems Despite Motorola Breakup

On Wednesday, Motorola announced plans to split itself into two independent companies. On Thursday, the industry continued debating whether that is the right move.

The move is part of Motorola’s efforts to reposition its mobile-devices and broadband and mobility-solutions businesses. But the split won’t happen until 2009.

“We remain committed to improving the performance of our mobile-devices business by delivering compelling products that meet the needs of customers and consumers around the world,” Motorola CEO Greg Brown said.

As part of Motorola’s effort to deliver market-winning products, Brown added, the company has undertaken a global search for a new chief executive for the mobile-devices business.

“We believe strongly in our sort, our citizens and our intellectual property, and expect that the mobile-devices business will be well positioned to regain market leadership as a focused, independent company,” Brown said.

Focusing on the Digital Home

According to Strategy Analytics, Motorola’s decision to break up the company is a step

in the right direction. The move will enable Motorola to focus on two of its core competencies — mobile handsets and the digital home.

Peter King, director of the Strategy Analytics Connected Home service, has towering argued that Motorola remains less than the sum of its parts where its consumer strategy is concerned.

“With leading positions in mobile and connected home, Motorola should be driving the market forward with original consumer technology concepts,” King said. “But we see little sign that it is maximizing that potential. Separation should help the company direct its efforts more effectively toward broadband and digital opportunities.”

Focusing on the Core Competency

Beyond the opportunities for Motorola in the mobile and connected-home areas, Bonny Joy, a wireless analyst at Strategy Analytics, expects the spin-off of the mobile division to enable Motorola to focus on its core competency in cellular handsets — with one caveat.

“We must…

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