Motorola May Split into Two Companies Next Year

Recently, Reuters reported a significant development that may change the mobile phone manufacturing industry. It became clear that Motorola was unable to find quick fix solutions for its problems when it announced that it would split into two publicly traded entities next year.

This seems to be the right decision as Motorola's shares rose 26 cents to $10.02 after they made the announcement. The company has continued to suffer from market share losses to Nokia, Samsung Electronics and other top rivals. The company also suffered a huge a loss in market value of 60 percent to about $22 billion in just over a year forcing the company to form a plan to split.

The company is looking into separating its mobile phone unit from the rest of the business. Besides manufacturing mobile phone devices, Motorola also manufactures network equipment and television set-top boxes.

Experts think that this decision may be able to help the company's recovery. The mobile phone manufacturer may find it easier to negotiate a joint venture or a sale for the cell phone business. However, top talent could leave amid the uncertainty that is besieging the the company.

Motorola has also decided to give in to activist investor Carl Icahn's demands. However, Carl is still determined to pursue the proxy battle he has waged with Motorola. If Motorola agrees to place Keith Meister on the bored, then Icahn will take a less aggressive stance. Meister is the chairman of Icahn Enterprises and manager of the investor's $8 billion fund.

I hope that Motorola will be able to benefit from this decision. I also hope that they will continue to provide quality mobile phones to consumers. Competition between manufacturers ensures that they will continue to provide the best products possible so taking Motorola out of the competition may not benefit consumers.