Filed under: Products and services, Competitive strategy, Motorola (MOT)
After Motorola, Inc. (NYSE: MOT) stated it was considering options to spin off or sell its money-losing wireless handset division a few weeks ago, the company’s new CEO, Greg Brown, stated that the company is “fully committed” to the mobile device business. Okay — which is it? Brown went on: “Motorola is fully committed to the mobile devices business and I am fully committed to mobile devices.” Fully committed to keeping it in-house or selling it off? One has to wonder.
Motorola’s brand in the cellphone business is a very good one, although that division’s profit troubles and sales numbers have been really horrid in the last 12 months. Still, unless the company could easily be worth more to shareholders if split up (i.e., Carl Icahn), then refocusing efforts in its handset division should be a top priority. Motorola was once on top of the world with the RAZR. There’s no reason it can’t be there again.
It’s hard to believe that Motorola’s brand recognition in the ultra-competitive handset business is tarnished. It’s just the sales and profit that’s lacking. So, within the fast pace that the handset business works in, Brown’s test will be to fix those problems and get Motorola’s nameplate again at the top of the sales charts. The market might give him all of 2008 to do so, but many investors, unfortunately, want instant gratification after former CEO Ed Zander’s results.
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