Google's patent play: RM37.5bil for Motorola Mobility

It may be boldest move yet by a company known for being audacious: Google is spending US$12.5bil to buy Motorola Mobility. But the big prize isn't Motorola's lineup of cellphones, computer Tablets and cable set-top boxes.

It is Motorola's more than 17,000 patents - a crucial weapon in an intellectual arms race with Apple, Microsoft and Oracle to gain more control over the increasingly lucrative market for smartphones, Tablets and other mobile devices.

If approved by federal regulators, the deal announced on Monday could also trigger more multibillion-dollar buyouts. Nokia Corp, another cellphone manufacturer, and Research In Motion Ltd, which makes the BlackBerry, loom as prime targets.


The patents would help Google defend Android, its operating system for mobile devices, against a litany of lawsuits alleging that Google and its partners pilfered the innovations of other companies.

In addition to the existing trove of patents that attracted Google's interest, Motorola, which introduced its first cellphone nearly 30 years ago, has 7,500 others awaiting approval.

Phone makers and software companies are engaged in all-out combat over patents for mobile devices. The tussle has been egged on by the US patent system, which makes it possible to patent any number of phone features.

Patents can cover the smallest detail, such as the way icons are positioned on a smartphone's screen. Companies can own intellectual-property rights to the finger swipes that allow you to switch between applications or scroll through displayed text.

Apple, for example, has patented the way an application expands to fill the screen when its icon is tapped. The maker of the iPhone sued Taiwan's HTC Corp because it makes Android phones that employ a similar visual gimmick.

The iPhone's success triggered the patent showdown. Apple's handset revolutionised the way people interact with phones and led to copycat attempts, most of which relied on the free Android software that Google introduced in 2008.

Legal cover
Android revolves around open-source coding that can be tweaked to suit the needs of different vendors. That flexibility and Android's growing popularity have fuelled the legal attacks. About 550,000 devices running the software are activated each day.

Many upstart manufacturers, like HTC, had only small patent portfolios of their own, leaving them vulnerable to Apple Inc and Microsoft Corp.

Getting Motorola's patents would allow Google to offer legal cover for HTC and dozens of other device makers, including Samsung Electronics Co, that depend on Android.

The deal is by far the largest Google has pursued in its 13-year history. Motorola Mobility's price tag exceeds the combined US$10.2bil that the company has paid for 136 previous acquisitions since going public in 2004, according to filings with the Securities and Exchange Commission.

Buying Motorola also would push Google into phone and computer Tablet manufacturing, competing with other device makers who rely on Android. The largest makers of Android devices are all supporting a deal that Google CEO Larry Page said was too tempting to resist.

"With mobility increasingly taking centre stage in the computing revolution, the combination with Motorola is an extremely important step in Google's continuing evolution," Page told analysts in a conference call on Monday.

Google pounced on Motorola less than two months after a group including Apple and Microsoft paid US$4.5bil for 6,000 patents owned by Nortel, a bankrupt Canadian maker of telecommunications equipment.

Leaving no doubt about the mounting antagonism among the companies, Google's top lawyer lambasted Apple and Microsoft for their legal manoeuvring earlier this month in a blog post titled "When patents attack Android."

"We believe this acquisition was solely driven by the ongoing patent war," Sanford Bernstein analyst Pierre Ferragu wrote in a research note, referring to the Google deal.

Apple and Google were once so close that Google's former CEO, Eric Schmidt, sat on Apple's board. But Google has since rolled out Android and provided hardware makers a way to counter the iPhone and iPad. Schmidt resigned from Apple's board two years ago.

Microsoft, for years one of Google's most bitter rivals, is desperately trying to make inroads in the mobile device market. John McCarthy, an analyst with Forrester Research, said Microsoft may try to counter Google by pursuing a long-rumoured takeover of its partner, Nokia.

Oracle Corp is seeking billions of dollars from Google in a federal lawsuit alleging that Android owes licensing fees for using the Java programming language that Oracle acquired from Sun Microsystems.

Cash rich
Buying patent protection offered by Motorola Mobility will be expensive. Although Google has US$39bil in cash and can easily afford it, the price translates to US$40 per share, 63% above Motorola's stock price before the deal was announced.

Motorola Mobility Holdings Inc's stock soared 56%, or US$13.65, to US$38.12. Google Inc lost about 1% and closed at US$557.23.

The deal will test Page's ability to avoid a clash of cultures while he is still learning the nuances of the CEO job, which he took only four and a half months ago. With 19,000 workers, Motorola Mobility's payroll isn't that much smaller than Google's 28,800.

It's a coup for Motorola Mobility CEO Sanjay Jha and the company's largest shareholder, billionaire investor Carl Icahn, who had been pressuring Jha to cash in on the patent portfolio. With an 11.4% stake in Motorola Mobility, Icahn is in line to be paid more than US$1.3bil.

Motorola Mobility, based in Libertyville, Illinois, has been struggling to come up with a product that has mass-market appeal since it introduced the Razr cellphone in 2005.

The company had some success with the Droid, one of the first phones to run on Android, but it now ranks a distant eighth in the smartphone market, with 4.4 million units shipped in the second quarter, according to research firm Canaccord Genuity. By comparison, the market-leading iPhone shipped about 20 million.

An attempt to counter the iPad hasn't paid off for Motorola Mobility, either. In an effort to drum up more demand, the company recently cut the price on the WiFi-only version of its Tablet, the Xoom, to US$499 from US$599.

The troubles saddled Motorola Mobility with a US$56mil loss in its latest quarter, sinking the company's stock price to one of its lowest points since its January spinoff from the old Motorola Inc.

The remaining part of that company now runs as Motorola Solutions Inc. In contrast, Google earned US$2.5bil in its most recent quarter ending in June.

Google's patent play: RM37.5bil for Motorola Mobility

It may be boldest move yet by a company known for being audacious: Google is spending US$12.5bil to buy Motorola Mobility. But the big prize isn't Motorola's lineup of cellphones, computer Tablets and cable set-top boxes.

It is Motorola's more than 17,000 patents - a crucial weapon in an intellectual arms race with Apple, Microsoft and Oracle to gain more control over the increasingly lucrative market for smartphones, Tablets and other mobile devices.

If approved by federal regulators, the deal announced on Monday could also trigger more multibillion-dollar buyouts. Nokia Corp, another cellphone manufacturer, and Research In Motion Ltd, which makes the BlackBerry, loom as prime targets.


The patents would help Google defend Android, its operating system for mobile devices, against a litany of lawsuits alleging that Google and its partners pilfered the innovations of other companies.

In addition to the existing trove of patents that attracted Google's interest, Motorola, which introduced its first cellphone nearly 30 years ago, has 7,500 others awaiting approval.

Phone makers and software companies are engaged in all-out combat over patents for mobile devices. The tussle has been egged on by the US patent system, which makes it possible to patent any number of phone features.

Patents can cover the smallest detail, such as the way icons are positioned on a smartphone's screen. Companies can own intellectual-property rights to the finger swipes that allow you to switch between applications or scroll through displayed text.

Apple, for example, has patented the way an application expands to fill the screen when its icon is tapped. The maker of the iPhone sued Taiwan's HTC Corp because it makes Android phones that employ a similar visual gimmick.

The iPhone's success triggered the patent showdown. Apple's handset revolutionised the way people interact with phones and led to copycat attempts, most of which relied on the free Android software that Google introduced in 2008.

Legal cover
Android revolves around open-source coding that can be tweaked to suit the needs of different vendors. That flexibility and Android's growing popularity have fuelled the legal attacks. About 550,000 devices running the software are activated each day.

Many upstart manufacturers, like HTC, had only small patent portfolios of their own, leaving them vulnerable to Apple Inc and Microsoft Corp.

Getting Motorola's patents would allow Google to offer legal cover for HTC and dozens of other device makers, including Samsung Electronics Co, that depend on Android.

The deal is by far the largest Google has pursued in its 13-year history. Motorola Mobility's price tag exceeds the combined US$10.2bil that the company has paid for 136 previous acquisitions since going public in 2004, according to filings with the Securities and Exchange Commission.

Buying Motorola also would push Google into phone and computer Tablet manufacturing, competing with other device makers who rely on Android. The largest makers of Android devices are all supporting a deal that Google CEO Larry Page said was too tempting to resist.

"With mobility increasingly taking centre stage in the computing revolution, the combination with Motorola is an extremely important step in Google's continuing evolution," Page told analysts in a conference call on Monday.

Google pounced on Motorola less than two months after a group including Apple and Microsoft paid US$4.5bil for 6,000 patents owned by Nortel, a bankrupt Canadian maker of telecommunications equipment.

Leaving no doubt about the mounting antagonism among the companies, Google's top lawyer lambasted Apple and Microsoft for their legal manoeuvring earlier this month in a blog post titled "When patents attack Android."

"We believe this acquisition was solely driven by the ongoing patent war," Sanford Bernstein analyst Pierre Ferragu wrote in a research note, referring to the Google deal.

Apple and Google were once so close that Google's former CEO, Eric Schmidt, sat on Apple's board. But Google has since rolled out Android and provided hardware makers a way to counter the iPhone and iPad. Schmidt resigned from Apple's board two years ago.

Microsoft, for years one of Google's most bitter rivals, is desperately trying to make inroads in the mobile device market. John McCarthy, an analyst with Forrester Research, said Microsoft may try to counter Google by pursuing a long-rumoured takeover of its partner, Nokia.

Oracle Corp is seeking billions of dollars from Google in a federal lawsuit alleging that Android owes licensing fees for using the Java programming language that Oracle acquired from Sun Microsystems.

Cash rich
Buying patent protection offered by Motorola Mobility will be expensive. Although Google has US$39bil in cash and can easily afford it, the price translates to US$40 per share, 63% above Motorola's stock price before the deal was announced.

Motorola Mobility Holdings Inc's stock soared 56%, or US$13.65, to US$38.12. Google Inc lost about 1% and closed at US$557.23.

The deal will test Page's ability to avoid a clash of cultures while he is still learning the nuances of the CEO job, which he took only four and a half months ago. With 19,000 workers, Motorola Mobility's payroll isn't that much smaller than Google's 28,800.

It's a coup for Motorola Mobility CEO Sanjay Jha and the company's largest shareholder, billionaire investor Carl Icahn, who had been pressuring Jha to cash in on the patent portfolio. With an 11.4% stake in Motorola Mobility, Icahn is in line to be paid more than US$1.3bil.

Motorola Mobility, based in Libertyville, Illinois, has been struggling to come up with a product that has mass-market appeal since it introduced the Razr cellphone in 2005.

The company had some success with the Droid, one of the first phones to run on Android, but it now ranks a distant eighth in the smartphone market, with 4.4 million units shipped in the second quarter, according to research firm Canaccord Genuity. By comparison, the market-leading iPhone shipped about 20 million.

An attempt to counter the iPad hasn't paid off for Motorola Mobility, either. In an effort to drum up more demand, the company recently cut the price on the WiFi-only version of its Tablet, the Xoom, to US$499 from US$599.

The troubles saddled Motorola Mobility with a US$56mil loss in its latest quarter, sinking the company's stock price to one of its lowest points since its January spinoff from the old Motorola Inc.

The remaining part of that company now runs as Motorola Solutions Inc. In contrast, Google earned US$2.5bil in its most recent quarter ending in June.

Google's patent play: RM37.5bil for Motorola Mobility

It may be boldest move yet by a company known for being audacious: Google is spending US$12.5bil to buy Motorola Mobility. But the big prize isn't Motorola's lineup of cellphones, computer Tablets and cable set-top boxes.

It is Motorola's more than 17,000 patents - a crucial weapon in an intellectual arms race with Apple, Microsoft and Oracle to gain more control over the increasingly lucrative market for smartphones, Tablets and other mobile devices.

If approved by federal regulators, the deal announced on Monday could also trigger more multibillion-dollar buyouts. Nokia Corp, another cellphone manufacturer, and Research In Motion Ltd, which makes the BlackBerry, loom as prime targets.


The patents would help Google defend Android, its operating system for mobile devices, against a litany of lawsuits alleging that Google and its partners pilfered the innovations of other companies.

In addition to the existing trove of patents that attracted Google's interest, Motorola, which introduced its first cellphone nearly 30 years ago, has 7,500 others awaiting approval.

Phone makers and software companies are engaged in all-out combat over patents for mobile devices. The tussle has been egged on by the US patent system, which makes it possible to patent any number of phone features.

Patents can cover the smallest detail, such as the way icons are positioned on a smartphone's screen. Companies can own intellectual-property rights to the finger swipes that allow you to switch between applications or scroll through displayed text.

Apple, for example, has patented the way an application expands to fill the screen when its icon is tapped. The maker of the iPhone sued Taiwan's HTC Corp because it makes Android phones that employ a similar visual gimmick.

The iPhone's success triggered the patent showdown. Apple's handset revolutionised the way people interact with phones and led to copycat attempts, most of which relied on the free Android software that Google introduced in 2008.

Legal cover
Android revolves around open-source coding that can be tweaked to suit the needs of different vendors. That flexibility and Android's growing popularity have fuelled the legal attacks. About 550,000 devices running the software are activated each day.

Many upstart manufacturers, like HTC, had only small patent portfolios of their own, leaving them vulnerable to Apple Inc and Microsoft Corp.

Getting Motorola's patents would allow Google to offer legal cover for HTC and dozens of other device makers, including Samsung Electronics Co, that depend on Android.

The deal is by far the largest Google has pursued in its 13-year history. Motorola Mobility's price tag exceeds the combined US$10.2bil that the company has paid for 136 previous acquisitions since going public in 2004, according to filings with the Securities and Exchange Commission.

Buying Motorola also would push Google into phone and computer Tablet manufacturing, competing with other device makers who rely on Android. The largest makers of Android devices are all supporting a deal that Google CEO Larry Page said was too tempting to resist.

"With mobility increasingly taking centre stage in the computing revolution, the combination with Motorola is an extremely important step in Google's continuing evolution," Page told analysts in a conference call on Monday.

Google pounced on Motorola less than two months after a group including Apple and Microsoft paid US$4.5bil for 6,000 patents owned by Nortel, a bankrupt Canadian maker of telecommunications equipment.

Leaving no doubt about the mounting antagonism among the companies, Google's top lawyer lambasted Apple and Microsoft for their legal manoeuvring earlier this month in a blog post titled "When patents attack Android."

"We believe this acquisition was solely driven by the ongoing patent war," Sanford Bernstein analyst Pierre Ferragu wrote in a research note, referring to the Google deal.

Apple and Google were once so close that Google's former CEO, Eric Schmidt, sat on Apple's board. But Google has since rolled out Android and provided hardware makers a way to counter the iPhone and iPad. Schmidt resigned from Apple's board two years ago.

Microsoft, for years one of Google's most bitter rivals, is desperately trying to make inroads in the mobile device market. John McCarthy, an analyst with Forrester Research, said Microsoft may try to counter Google by pursuing a long-rumoured takeover of its partner, Nokia.

Oracle Corp is seeking billions of dollars from Google in a federal lawsuit alleging that Android owes licensing fees for using the Java programming language that Oracle acquired from Sun Microsystems.

Cash rich
Buying patent protection offered by Motorola Mobility will be expensive. Although Google has US$39bil in cash and can easily afford it, the price translates to US$40 per share, 63% above Motorola's stock price before the deal was announced.

Motorola Mobility Holdings Inc's stock soared 56%, or US$13.65, to US$38.12. Google Inc lost about 1% and closed at US$557.23.

The deal will test Page's ability to avoid a clash of cultures while he is still learning the nuances of the CEO job, which he took only four and a half months ago. With 19,000 workers, Motorola Mobility's payroll isn't that much smaller than Google's 28,800.

It's a coup for Motorola Mobility CEO Sanjay Jha and the company's largest shareholder, billionaire investor Carl Icahn, who had been pressuring Jha to cash in on the patent portfolio. With an 11.4% stake in Motorola Mobility, Icahn is in line to be paid more than US$1.3bil.

Motorola Mobility, based in Libertyville, Illinois, has been struggling to come up with a product that has mass-market appeal since it introduced the Razr cellphone in 2005.

The company had some success with the Droid, one of the first phones to run on Android, but it now ranks a distant eighth in the smartphone market, with 4.4 million units shipped in the second quarter, according to research firm Canaccord Genuity. By comparison, the market-leading iPhone shipped about 20 million.

An attempt to counter the iPad hasn't paid off for Motorola Mobility, either. In an effort to drum up more demand, the company recently cut the price on the WiFi-only version of its Tablet, the Xoom, to US$499 from US$599.

The troubles saddled Motorola Mobility with a US$56mil loss in its latest quarter, sinking the company's stock price to one of its lowest points since its January spinoff from the old Motorola Inc.

The remaining part of that company now runs as Motorola Solutions Inc. In contrast, Google earned US$2.5bil in its most recent quarter ending in June.

Motorola Atrix 4G now considered as World’s most powerful smartphone

AT&T and Motorola, or should I say Motorola Mobility, had quite a treat to announce at CES 2011 this week. The Android 2.2 powered Motorola ATRIX 4G will be offered exclusively by AT&T and is being billed as the world’s most powerful smartphone. That’s probably due in part to the phone’s 1GHz NVIDIA Tegra dual core processor which is capable of supporting intense 3D graphics.

Speaking of graphics, consumers will also appreciate the QHD display that offers 24-bit graphics with a refresh rate that’s faster than other smartphones. The Motorola ATRIX 4G will also come with 1GB of RAM with up to 48GB of available memory for storage of songs, photos and files.

Since you’ll be able to keep a lot on your smartphone you’ll be happy to know the ATRIX 4G offers advanced fingerprint recognition which not only makes your phone secure, but easy to access as well. Of course, at its core the ATRIX 4G is a phone right? That means good voice quality is key. Motorola Mobility has that covered as well with its two-microphone noise reduction technology. Naturally, there’s nothing impressive about the “world’s most powerful smartphone” if it just does voice calls. It also supports video conferencing with its front-facing VGA video camera.

With all those specs and features mentioned the crazy thing is that’s not even the coolest thing about the smartphone. A Vehicle Dock will be offered in addition to a HD Multimedia Dock which will allow consumers to connect their smartphone to an HD television to watch videos thanks to its HDMI 720p output. The jaw dropper accessory though has to be the Laptop Dock which turns the ATRIX 4G into a netbook thanks to the included Webtop application along with the dock’s display, QWERTY keyboard and mouse. The fact that the smartphone supports HTML5 is a bonus for the netbook feel.

The Motorola ATRIX 4G is expected to be launched by AT&T sometime during the first quarter.

Motorola Atrix 4G now considered as World’s most powerful smartphone

AT&T and Motorola, or should I say Motorola Mobility, had quite a treat to announce at CES 2011 this week. The Android 2.2 powered Motorola ATRIX 4G will be offered exclusively by AT&T and is being billed as the world’s most powerful smartphone. That’s probably due in part to the phone’s 1GHz NVIDIA Tegra dual core processor which is capable of supporting intense 3D graphics.

Speaking of graphics, consumers will also appreciate the QHD display that offers 24-bit graphics with a refresh rate that’s faster than other smartphones. The Motorola ATRIX 4G will also come with 1GB of RAM with up to 48GB of available memory for storage of songs, photos and files.

Since you’ll be able to keep a lot on your smartphone you’ll be happy to know the ATRIX 4G offers advanced fingerprint recognition which not only makes your phone secure, but easy to access as well. Of course, at its core the ATRIX 4G is a phone right? That means good voice quality is key. Motorola Mobility has that covered as well with its two-microphone noise reduction technology. Naturally, there’s nothing impressive about the “world’s most powerful smartphone” if it just does voice calls. It also supports video conferencing with its front-facing VGA video camera.

With all those specs and features mentioned the crazy thing is that’s not even the coolest thing about the smartphone. A Vehicle Dock will be offered in addition to a HD Multimedia Dock which will allow consumers to connect their smartphone to an HD television to watch videos thanks to its HDMI 720p output. The jaw dropper accessory though has to be the Laptop Dock which turns the ATRIX 4G into a netbook thanks to the included Webtop application along with the dock’s display, QWERTY keyboard and mouse. The fact that the smartphone supports HTML5 is a bonus for the netbook feel.

The Motorola ATRIX 4G is expected to be launched by AT&T sometime during the first quarter.

Motorola Atrix 4G now considered as World’s most powerful smartphone

AT&T and Motorola, or should I say Motorola Mobility, had quite a treat to announce at CES 2011 this week. The Android 2.2 powered Motorola ATRIX 4G will be offered exclusively by AT&T and is being billed as the world’s most powerful smartphone. That’s probably due in part to the phone’s 1GHz NVIDIA Tegra dual core processor which is capable of supporting intense 3D graphics.

Speaking of graphics, consumers will also appreciate the QHD display that offers 24-bit graphics with a refresh rate that’s faster than other smartphones. The Motorola ATRIX 4G will also come with 1GB of RAM with up to 48GB of available memory for storage of songs, photos and files.

Since you’ll be able to keep a lot on your smartphone you’ll be happy to know the ATRIX 4G offers advanced fingerprint recognition which not only makes your phone secure, but easy to access as well. Of course, at its core the ATRIX 4G is a phone right? That means good voice quality is key. Motorola Mobility has that covered as well with its two-microphone noise reduction technology. Naturally, there’s nothing impressive about the “world’s most powerful smartphone” if it just does voice calls. It also supports video conferencing with its front-facing VGA video camera.

With all those specs and features mentioned the crazy thing is that’s not even the coolest thing about the smartphone. A Vehicle Dock will be offered in addition to a HD Multimedia Dock which will allow consumers to connect their smartphone to an HD television to watch videos thanks to its HDMI 720p output. The jaw dropper accessory though has to be the Laptop Dock which turns the ATRIX 4G into a netbook thanks to the included Webtop application along with the dock’s display, QWERTY keyboard and mouse. The fact that the smartphone supports HTML5 is a bonus for the netbook feel.

The Motorola ATRIX 4G is expected to be launched by AT&T sometime during the first quarter.

Breakup of gadget pioneer Motorola is complete

NEW BEGINNING: Jha (second from right) and Motorola Mobility executives holding up their mobile devices as they prepare to ring the opening bell at the New York Stock Exchange. - AP

NEW YORK: Motorola, the 82-year-old consumer electronics pioneer responsible for early televisions, cellphones and even the first broadcast from the moon, has split into two companies in a reflection of changing markets.

As separate companies - Mobility, targeting consumers, and Solutions, for professionals - the two will have simpler stories to tell investors and a nimbler approach to developing cutting-edge products such as Tablet computers.

Sanjay Jha, CEO of the consumer-focused Motorola Mobility Holdings Inc, said in an interview that the new company will benefit from a narrower focus, all the way up to the top management and the board of directors.

"I think you'll see a board that is much more focused on understanding technology as opposed to managing a portfolio of products," Jha said.

For decades, Motorola Inc's products told the story of the march of electronics into the hands of consumers: Car radios in the 1930s, TVs in the 1940s and cellphones starting the 1980s.

The company also expanded into police radios and barcode scanners aimed at government agencies and large businesses. These divisions complicated the picture Motorola painted for investors; now, they make up the second company, Motorola Solutions Inc.

With the breakup comes a shrunken bureaucracy, which both companies hope will help them make faster decisions and compete better in the marketplace.

"Motorola (Mobility) can be focused on handsets and nothing but handsets in a world where so much as changed over the last five years is good thing," said Gartner analyst Michael Gartenberg. Likewise, Solutions doesn't have to worry about the once-flailing cellphone business.

"Hopefully this will lead to more innovative designs, better time to markets and a better ability to not just capitalise on trends but also create trends," he said.

Dan Maloney, Mobility's president, also said a smaller company that excels at just a few things might spur employees to be more creative.

"Inside Motorola, it was difficult at times for employees to understand how what they were doing was going to directly have an impact on financial performance because it was such a large, multi-faceted entity," he said.

In a statement, Motorola Solutions spokesman Tama McWhinney looked forward to similar benefits.

"The separation gives us increased strategic flexibility and the opportunity to focus on this part of the portfolio with clarity, purpose and management focus," McWhinney said.

As part of the breakup, Motorola is selling its cellular network equipment division to Nokia Siemens Networks, a Finnish-German joint venture. Regulators in China are still reviewing the US$1.2bil (RM3.8bil) sale, which is expected to close in the next three months.

Wireless carriers have consolidated into larger companies and prefer to deal with only a couple of equipment vendors each, leaving few opportunities for a small vendor like Motorola that wasn't dedicated to making network gear.

The point of one company making both cellphones and the equipment that connects their calls has diminished as the technology has become standard.

Meanwhile, the company had to contend with companies such as Apple Inc and BlackBerry maker Research In Motion Ltd, which focus on mobile devices.

Motorola's cellphone division once enjoyed strong sales thanks to the Razr, a 2004 feature phone that became a best-seller. As recently as 2007, cellphones accounted for two-thirds of the company's revenue. But without a blockbuster smartphone, the division fell into a slump that lasted until the most recent quarter.

In 2008, under pressure from activist investor Carl Icahn, Motorola set the breakup in motion. It hired Jha, then the chief operating officer of mobile chipmaker Qualcomm Inc, to strengthen the declining phone business. A turnaround is now under way, with a focus on smartphones such as the Droid that run Google Inc's Android software.

This year, Mobility expects to claim more market share in Latin America and China while dipping its toes into the US Tablet market, a category Jha says is one of the company's growth areas.

And while Jha said he wants to build a big company, that isn't Motorola's goal for the current year. The company's market cap as of Jan 4 was US$9.69bil, a fraction of Apple's US$302.48bil market value.

"I'm not a believer in scale for its own sake," Jha said. "I am much more focused on being able to deliver world-class products. In 1997 Apple didn't have scale. Only a few short years ago RIM didn't have sale. Nokia still has scale. I'm not sure scale alone defines your success or your future." - AP

Breakup of gadget pioneer Motorola is complete

NEW BEGINNING: Jha (second from right) and Motorola Mobility executives holding up their mobile devices as they prepare to ring the opening bell at the New York Stock Exchange. - AP

NEW YORK: Motorola, the 82-year-old consumer electronics pioneer responsible for early televisions, cellphones and even the first broadcast from the moon, has split into two companies in a reflection of changing markets.

As separate companies - Mobility, targeting consumers, and Solutions, for professionals - the two will have simpler stories to tell investors and a nimbler approach to developing cutting-edge products such as Tablet computers.

Sanjay Jha, CEO of the consumer-focused Motorola Mobility Holdings Inc, said in an interview that the new company will benefit from a narrower focus, all the way up to the top management and the board of directors.

"I think you'll see a board that is much more focused on understanding technology as opposed to managing a portfolio of products," Jha said.

For decades, Motorola Inc's products told the story of the march of electronics into the hands of consumers: Car radios in the 1930s, TVs in the 1940s and cellphones starting the 1980s.

The company also expanded into police radios and barcode scanners aimed at government agencies and large businesses. These divisions complicated the picture Motorola painted for investors; now, they make up the second company, Motorola Solutions Inc.

With the breakup comes a shrunken bureaucracy, which both companies hope will help them make faster decisions and compete better in the marketplace.

"Motorola (Mobility) can be focused on handsets and nothing but handsets in a world where so much as changed over the last five years is good thing," said Gartner analyst Michael Gartenberg. Likewise, Solutions doesn't have to worry about the once-flailing cellphone business.

"Hopefully this will lead to more innovative designs, better time to markets and a better ability to not just capitalise on trends but also create trends," he said.

Dan Maloney, Mobility's president, also said a smaller company that excels at just a few things might spur employees to be more creative.

"Inside Motorola, it was difficult at times for employees to understand how what they were doing was going to directly have an impact on financial performance because it was such a large, multi-faceted entity," he said.

In a statement, Motorola Solutions spokesman Tama McWhinney looked forward to similar benefits.

"The separation gives us increased strategic flexibility and the opportunity to focus on this part of the portfolio with clarity, purpose and management focus," McWhinney said.

As part of the breakup, Motorola is selling its cellular network equipment division to Nokia Siemens Networks, a Finnish-German joint venture. Regulators in China are still reviewing the US$1.2bil (RM3.8bil) sale, which is expected to close in the next three months.

Wireless carriers have consolidated into larger companies and prefer to deal with only a couple of equipment vendors each, leaving few opportunities for a small vendor like Motorola that wasn't dedicated to making network gear.

The point of one company making both cellphones and the equipment that connects their calls has diminished as the technology has become standard.

Meanwhile, the company had to contend with companies such as Apple Inc and BlackBerry maker Research In Motion Ltd, which focus on mobile devices.

Motorola's cellphone division once enjoyed strong sales thanks to the Razr, a 2004 feature phone that became a best-seller. As recently as 2007, cellphones accounted for two-thirds of the company's revenue. But without a blockbuster smartphone, the division fell into a slump that lasted until the most recent quarter.

In 2008, under pressure from activist investor Carl Icahn, Motorola set the breakup in motion. It hired Jha, then the chief operating officer of mobile chipmaker Qualcomm Inc, to strengthen the declining phone business. A turnaround is now under way, with a focus on smartphones such as the Droid that run Google Inc's Android software.

This year, Mobility expects to claim more market share in Latin America and China while dipping its toes into the US Tablet market, a category Jha says is one of the company's growth areas.

And while Jha said he wants to build a big company, that isn't Motorola's goal for the current year. The company's market cap as of Jan 4 was US$9.69bil, a fraction of Apple's US$302.48bil market value.

"I'm not a believer in scale for its own sake," Jha said. "I am much more focused on being able to deliver world-class products. In 1997 Apple didn't have scale. Only a few short years ago RIM didn't have sale. Nokia still has scale. I'm not sure scale alone defines your success or your future." - AP

Breakup of gadget pioneer Motorola is complete

NEW BEGINNING: Jha (second from right) and Motorola Mobility executives holding up their mobile devices as they prepare to ring the opening bell at the New York Stock Exchange. - AP

NEW YORK: Motorola, the 82-year-old consumer electronics pioneer responsible for early televisions, cellphones and even the first broadcast from the moon, has split into two companies in a reflection of changing markets.

As separate companies - Mobility, targeting consumers, and Solutions, for professionals - the two will have simpler stories to tell investors and a nimbler approach to developing cutting-edge products such as Tablet computers.

Sanjay Jha, CEO of the consumer-focused Motorola Mobility Holdings Inc, said in an interview that the new company will benefit from a narrower focus, all the way up to the top management and the board of directors.

"I think you'll see a board that is much more focused on understanding technology as opposed to managing a portfolio of products," Jha said.

For decades, Motorola Inc's products told the story of the march of electronics into the hands of consumers: Car radios in the 1930s, TVs in the 1940s and cellphones starting the 1980s.

The company also expanded into police radios and barcode scanners aimed at government agencies and large businesses. These divisions complicated the picture Motorola painted for investors; now, they make up the second company, Motorola Solutions Inc.

With the breakup comes a shrunken bureaucracy, which both companies hope will help them make faster decisions and compete better in the marketplace.

"Motorola (Mobility) can be focused on handsets and nothing but handsets in a world where so much as changed over the last five years is good thing," said Gartner analyst Michael Gartenberg. Likewise, Solutions doesn't have to worry about the once-flailing cellphone business.

"Hopefully this will lead to more innovative designs, better time to markets and a better ability to not just capitalise on trends but also create trends," he said.

Dan Maloney, Mobility's president, also said a smaller company that excels at just a few things might spur employees to be more creative.

"Inside Motorola, it was difficult at times for employees to understand how what they were doing was going to directly have an impact on financial performance because it was such a large, multi-faceted entity," he said.

In a statement, Motorola Solutions spokesman Tama McWhinney looked forward to similar benefits.

"The separation gives us increased strategic flexibility and the opportunity to focus on this part of the portfolio with clarity, purpose and management focus," McWhinney said.

As part of the breakup, Motorola is selling its cellular network equipment division to Nokia Siemens Networks, a Finnish-German joint venture. Regulators in China are still reviewing the US$1.2bil (RM3.8bil) sale, which is expected to close in the next three months.

Wireless carriers have consolidated into larger companies and prefer to deal with only a couple of equipment vendors each, leaving few opportunities for a small vendor like Motorola that wasn't dedicated to making network gear.

The point of one company making both cellphones and the equipment that connects their calls has diminished as the technology has become standard.

Meanwhile, the company had to contend with companies such as Apple Inc and BlackBerry maker Research In Motion Ltd, which focus on mobile devices.

Motorola's cellphone division once enjoyed strong sales thanks to the Razr, a 2004 feature phone that became a best-seller. As recently as 2007, cellphones accounted for two-thirds of the company's revenue. But without a blockbuster smartphone, the division fell into a slump that lasted until the most recent quarter.

In 2008, under pressure from activist investor Carl Icahn, Motorola set the breakup in motion. It hired Jha, then the chief operating officer of mobile chipmaker Qualcomm Inc, to strengthen the declining phone business. A turnaround is now under way, with a focus on smartphones such as the Droid that run Google Inc's Android software.

This year, Mobility expects to claim more market share in Latin America and China while dipping its toes into the US Tablet market, a category Jha says is one of the company's growth areas.

And while Jha said he wants to build a big company, that isn't Motorola's goal for the current year. The company's market cap as of Jan 4 was US$9.69bil, a fraction of Apple's US$302.48bil market value.

"I'm not a believer in scale for its own sake," Jha said. "I am much more focused on being able to deliver world-class products. In 1997 Apple didn't have scale. Only a few short years ago RIM didn't have sale. Nokia still has scale. I'm not sure scale alone defines your success or your future." - AP