Some tech-sector innovations were better left in the 20th century. On the pile of eight-track tape players, floppy drives, and CRT monitors, let's toss one more obsolete idea: The unwieldy, mismanaged tech conglomerate, spread out over several different markets that have little or nothing to do with each other.
Putting the "can't" in "conglomerate"
From the looks of things, even Motorola's management understands just how pointless it is to treat the company as an integrated corporate entity. Two "co-CEOs" run the company: Sanjay Jha, a former Qualcomm
It looks like Motorola's execs have begun to recognize the obvious. They're reportedly mulling the breakup of their beloved (or perhaps not so beloved) company into three parts. Sensibly enough, this breakup would start with the sale of the company's Home & Networks Mobility division, which makes set-top boxes, cable modems, and wireless and cable infrastructure equipment.
With $2 billion in revenue and $199 million in operating income last quarter, Home & Networks Mobility is probably the most valuable piece of Motorola's blemished empire. And with competition potentially heating up in the bread and butter set-top business thanks to Cisco Systems
The proceeds that Motorola would receive from the sale—The Wall Street Journal reported a $4.5 billion price tag—could allow the company to pay down its $3.9 billion in debt and prop up its sputtering mobile phone division, whose estimated 4.7% market share last quarter is a fraction of what it possessed a few years back.
It's been suggested that afterward, maybe in 2011, Motorola would also divest itself of its Enterprise Mobility division—a profitable, stable business that makes secure two-way radios, bar code readers, and corporate Wi-Fi equipment, among other things. Motorola might also sell this division for cash, or, with its balance sheet in good shape, do a traditional spinoff/IPO for its shareholders.
Either way, Motorola shareholders would be in much better shape than they are right now. Instead of the current mess, they'd be invested in one or two companies with healthy balance sheets, whose management teams weren't distracted by unrelated businesses. It's just a shame that Moto waited until the 21st century to take these steps.