Motorola's split plan calls for a debt-free, cash-heavy mobile unit
By Chris Ziegler 
posted June 18th 2010 2:55PM
posted June 18th 2010 2:55PM
Moto's composed of a number of fairly distinct divisions that produce vastly different kinds of hardware for different industries; some are cash cows, others -- namely the handset and set-top box units -- aren't. It looks like the company is preparing a pretty radical plan for its upcoming split that would call those underperforming divisions to get most of the cash reserves and almost none of its debt. Actually, neither Motorola Mobility nor Motorola Solutions (as they'll likely be known) will see much of the combined company's current debt load, as they're currently undertaking a massive debt buyback; afterward, Mobility will allegedly be cut a check for somewhere between $3 and $4 billion to go about its high-stakes business in the ultra-competitive smartphone game. The idea is to position both post-split companies with as much leverage as possible for acquisitions and low-cost borrowing. Solutions shouldn't have a problem, as its businesses already generate the overwhelming majority of Moto's cash -- but for Mobility, this should give the lil' sprout the best chance it has for survival.
The anti-palm. This is great for us.
@itsaddison
:o
@JonnyB I notice that 70% of your comments are that shocked face. If you want, i could fry you with force lightning, free of charge, to show you what a real shocked face looks like
@Lord Vader
:O
@Lord Vader Can you force choke me? I'm willing to pay some Droids for it!
@Lord Vader Premium.
MOTO mini Ftw
Sounds good. Hope things work out for them. It's funny how the old Droid is still quite competitive in the business. It still sells.
Evo here, but really want a Droid X... Sadly, I'm not on verizon. I just want the GPU chip that Droid put in.
The Droids by Motorola aren't bad, not at all.
This is good news, maybe this will allow the mobile division to continue to innovate from the Droid, rather than rehashing it every six months a la RAZR. They have a good thing going so long as the keep the momentum.
Maybe their handset and set-top box divisions aren't profitable because the second anyone uses any of their software they go into a vomiting rage. I've got a motorola satellite receiver and a couple motorola crap-phones (one's a world phone, the other is just for backup in case my regular phone gets eaten by a lion), and they all share the common theme that their software is the worst I've ever used on any of their respective devices.
F the set-top division. Those guys don't know how to build anything that doesn't lag/freeze/burn out. I hate moto boxes! And honestly if it weren't for the latest batch of android phones, I would say the same thing about their mobility division (though the backflip blows)
whew!
Okay, so can someone explain this to me. The company is splitting up into two completely independent companies. Not branches, not owned by the same parent company, independent. Doesn't that mean that apart from having similar names (can they still be both legally called Motorola), they will have nothing to do with one another as far as revenue goes? Why would Motorola want to create a spin-off company, make it debt free and give it a ton of cash...? Would Motorola own it? If they will both be separately traded, it means one will not be the parent of the other, otherwise it would simply be a brand. What's the point here, how is this benefitting Motorola?
@Yankee The division is losing millions, Motorola is spinning them off to increase profits, and to benefit their main business division. They are giving them cash, and buying their debt to allow them the best chance to succeed. It benefits Motorola, to not have to absorb the losses of the mobile division with the profits of the communication division.
@Yankee. The separation will be in the form of a stock split for the shareholders of the current company. This means it is in the best interest of everyone to get the under performing mobility division as financially strong as possible. The other division is a cash cow and will quickly get rid of any debt
When a moto phone comes out it either is great, or totally sucks. The droid is great, devour sucks. Get rid of MOTOBLUR since it's the glitchiest crap and the most out of date and just stick to Eclair and Froyo. It seems like everyone with a MOTOBLUR device has nothing buy problems.
The mobile division wouldn't be so underperforming if they stopped making crap like the Flipout, Backflip, and Motoblur.