Motorola breaks up with self

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Motorola’s handset struggles have been public for quite awhile and today a press release confirmed that the Mobile Phone Division will be separated from the rest of its operations. This will create two separate public companies and is an attempt at turning around its 45% decrease in stock price over the past year.

The downward spiral for Motorola is shocking to sources within the industry considering how fast it has happened. It wasn’t too long ago that the RAZR had just sold its 50th million unit and Nokia was looking over its back at the fast approaching Motorola in the rear view. Some 18+months and billions of dollars later, Motorola lost its vision and relied too much on ‘ultra thin devices’ that were classic form over function.

Greg Brown, Motorola’s president and CEO, was named to head the broadband and mobility division while a search was underway for the device division. The split will happen sometime early in 2009 and is a big win for Carl C. Icahn, an outspoken and respected stockholder that owns over 6% of Motorola and has been very critical of how the company has been operating. The split is his idea and now we will see if his influence on the Board will right this ship.

Motorola stock price is currently $9.85 per share.