Motorola has split. It seems, for some time, Motorola had two focuses, the mobile market and corporate market, which had created a de facto division within the company. Paul R. La Monica of CnnMoney.com reports in “Motorola finally breaks up. What Now?” that Tuesday morning the company officially split into two. The two divisions are Motorola Mobility and Motorola Solutions. The stock ticker also reflected the division; MOT became MMI (mobility) and MSI (solutions).
This isn’t bad news as shareholders have been waiting years for this moment. Now that the company is split, each side can effectively focus on their goals. The obvious goal for Motorola Mobility is the smartphone and tablet market. Sanjay Jha, the CEO of Motorola Mobility, stated in an interview (the video is embedded in the article) that the two companies were entirely different and will perform better separated.
He was asked if either side would be sold of which he responded no. As to how Motorola plans to become successful in the smartphone market and enter the tablet market well, he believes the smartphone market is in its infancy and the tablet market is only 9 months old, meaning there is room for others to join. As in reference to Apple, Jha stated:
“I don’t subscribe to the view that someone has come and played the game and taken the ball home with them”
These two separate companies will most likely grow differently. As La Monica reported, Motorola Solutions is long term and not subjected to tech trends and fads, as Motorola Mobility will be. This means Motorola Mobility is attractive as a short-term investment possibility and can grow rapidly in a shorter period. Motorola Solutions is safe and patient; Motorola Mobility will be risky and fast paced.
This break up is good. If both sides acted like oil and water, the consequences were going to be one side taking over the other, company failure, or company break up. Of all the options, company break up allows both sides to go their own ways while maintaining a link to Motorola. Considering Motorola Mobility is the fast paced, flexible division, all eyes will now be on them as they enter the tablet market. Tomorrow, at the Consumer Electronics Show in Las Vegas, Motorola Mobility is planning to reveal their tablet.
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