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Motorola – Keeping My Fingers Crossed
2/15/2010
By PJLouis
Tags: Motorola, handset, wireless, breakup

Comments on article found at online.wsj.com/article/SB10001424052748704140104575057602509599656.html

 

I have supported selling off the handset division and keeping the set top box division. However, this new plan is an interesting one. Frankly other than the fact both divisions are consume device divisions, I don’t see any other commonality.

 

Originally there seemed to be no hope of this once great company to come up with an innovative handset. Then BAM!!!! We got nailed with the recession. As I have always said, recessions have a way of leveling the playing field and buying distressed companies more time. I would say that providence fell right into Motorola’s lap.


On the face of it, Motorola’s plan to keep both handset and set-top box divisions makes sense. Both divisions are in the consumer devices business. However, both use very different technology tool sets and require different core skills. It is a great balance sheet rollup exercise but I need to think about the staffing and resource side of the equation.


It might work; I have seen far more bizarre corporate division pairings that have worked out. Think multi-national multi-product line companies that sell everything from toilet paper to toasters to canned dog food.


The company’s roots lie in its handsets/radios. The company was not a bad big iron vendor; but the constant internal dysfunction got in its way all of the time. I am personally glad the company is hanging onto its legacy and maintaining the Motorola brand. What did we used to call Motorola? Oh yeah “batwings”!! It will be good to see the batwings brand still around selling what made it famous.


The pairing might work, than again it might not. If the pairing is just a short term balance sheet exercise then the pairing might. The company is so tight on resources and cash that a ling term successful pairing might not be possible. It might last long enough for stock brokers to make a few quick bucks but that is about it.


I will keep my fingers crossed.


Keep an eye on the company.