AFI BLOG: Media and Technology

Business Week

The Razr maker will likely sell or spin off its cell-phone division. Possible acquirers include Asian rivals and private equity players

For connoisseurs of American electronics, Jan. 31 marks what may become the end of a technology icon. Motorola (MOT), the largest and most successful cell-phone manufacturer in the U.S., announced it’s considering separating the cell-phone division from the rest of its businesses, possibly through a sale.

The company had to say there’s no assurance a transaction will occur, but the statement from recently appointed Chief Executive Greg Brown reads like a fait accompli. “We are exploring ways in which our mobile devices business can accelerate its recovery and retain and attract talent while enabling our shareholders to realize the value of this great franchise,” Brown said.

The fact is, Motorola management has been unable to speed up the recovery under its current structure. It’s just not clear whether Motorola would sell the cell-phone unit or spin it off to shareholders. The company said it won’t discuss the options under consideration until the board of directors picks one.