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Moto May Exit Phones

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Moto May Exit Phones

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Motorola has confirmed rumors that it might pull out of cell phones, the now-ubiquitous device that it invented.

It put out a statement saying it was “exploring the structural and strategic realignment of its business” and that its alternatives include “the separation of mobile devices from its other business.”

Motorola’s sales of mobiles were down 38% in Q4 and company profits down 84% from $523 million to $111 million.

OK. We just want to say we told you so.

Back in November when Motorola CEO Ed Zander threw in the towel we observed here that since Eddie had led Sun into the valley of the shadow of death five years ago it had never recovered and predicted that there was a pretty good chance the same thing could happen to Moto.

‘Pears it has.

Motorola has a track record of exiting core businesses. Before our time – well, most of us anyway, it exited radios and televisions. But who exactly is going to buy a dying business that can’t replace the short-term glory of the RAZR and what exactly does it expects to fall back on at this point – set-top boxes? Telecom network gear?

Phones are still half the company’s business for Pete’s sake.

It fancies that restructuring will accelerate the unit’s recovery and hold and attract talent.

Meanwhile, in the background activist shareholder Carl Icahn and his 3.3% stake is preparing for a proxy fight for seats on Moto’s board. Icahn has been pushing for a spin-off claiming it will unlock $20 billion in value. He lost a proxy fight last spring.


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