Motorola to Split into Two Companies

In 2007, when Apple introduced the i Phone, they immediately became the most dominant player in the cell phone market. For the competition, this meant a constant scramble to reinvent themselves; in an effort to keep up with such changes that were occurring. With, most of the major manufacturers having introduced their own versions of smart phones, with the exception of Motorola. Who never was able to repeat the success that it had with the Razor, in 2005 and 2006. As a result, the price of the stock has collapsed, as the company has been seeing a serious decline in market share and earnings.

Part of the reason for this, was that the company had become to large. Where, the two main divisions, cell phones and set top boxes began to provide a stark contrast to the changing business environment. To adapt to these changes, Motorola announced that they will be splitting the company in two different pieces by early 2011.

What this shows, is that Motorola is becoming smaller to more effectively compete. Combines this with the fact that the company is going to be launching the Google Android next month, highlights how management is preparing for a heated show down with Apple. While, no one knows what the future may hold, the splitting into two different companies will more than likely increase value for the shareholders. As earnings comparisons should be easier to meet, and if the Android is as popular as some are claiming; means that this move could prove to be a wise decision by the management.