Motorola Delays Mobile Division Spin Off

Motorola posted a substantial loss for its third quarter of 2008, announcing it lost some $379 million during the quarter, owing in part to cost-cutting as the company clashes jobs and simplifies its operations. But Motorola also announced it is delaying the long-percolating spinoff of its mobile device business—originally announced last May and scheduled to be completed in early 2009—and will pare own its mobile efforts from some 20 mobile platforms to just three: its own P2K for entry-level units, Windows Mobile for business smartphones, and Google’s Android platform for consumer-oriented handsets.

During the third quarter of 2008, Motorola’s cell phone unit lost $840 million dollars on revenue of $3.1 billion—including an inventory write-off of some $370 million. The company sold some 25.4 million phones during the quarter, compared to 28.1 million units in the same quarter a year ago. As a result, the company dropped from third to fourth place amongst mobile phone makers in the global market, with Nokia, Samsung, and SOny Ericsson capturing greater shares of the world market. Motorola still accounts for 8.5 percent of the market.

Motorola’s Sanjay Jha, who was brought in from Qualcomm to lead the handset division last August, noted that global economic uncertainty and stresses in the financial market were the main reasons for delaying the spin off of Motorola’s handset division. “While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices.”