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Motorola to Split Into Two Entities

Motorola will separate its TV box and phone business from its networking and business mobility units early next year.

Updated since 4:47 pm Thursday with financial information.

Schaumburg, Ill. (


) --



co-CEO Sanjay Jha finally gets to run his own show.

Effective immediately, the mobile phone chief will run Motorola's phone and set-top box business as the company prepares to split into two units.

Motorola's CEO Sanjay Jha.

Fellow co-CEO Greg Brown will run the company's networking and business mobility divisions. These two units will be spun off into separate entities through a share distribution to stockholders in the first quarter of 2011, according to Motorola.

The split is expected to shove Motorola's $3.4 billion debt on to Brown's networking business, giving the money-losing phone operation a fresh break. The company will have to share the $8 billion in cash and investments it has in the U.S. and overseas.

The new structure pairs two strong businesses with two weaker units. The mobile phone division, which has returned to sales growth after years of decline, is being paired with the declining cable box operation. And the declining network infrastructure business will be more than offset by a strong business mobility shop, a unit that some analysts give more than a $6 billion market value.

The move comes after Jha delivered on his plan last year to retool the wireless titan around a smartphone product line using


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Android operating system.

"Our expanding portfolio of smartphones and end-to-end video content delivery capabilities will enable us to provide advanced mobile media solutions and multi-screen experiences for our customers," Jha said in a press release Thursday.

Motorola shares rose 3% to $6.88 in afterhours trading as news of the split-up was released.

--Reported by Scott Moritz in New York

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