What Motorola's Spin Off Will Mean to PartnersBy Leah Gabriel Nurik | Posted 2010-08-16 Email Print
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Motorola's smartphone business is booming again, thanks to hits like the Droid X. But will the company be taking partners along for the ride when it splits into two companies -- Motorola Mobility and Motorola Solutions?
With recent quarterly earnings beating almost all expectations, Motorola is making a name for itself as the "comeback kid." The company surpassed its Q2 shipment numbers, and is planning for a successful handoff of its network business and a complete restructuring to occur in Q1 2011. All solid proof that momentum is growing, and putting one of America’s iconic companies on a path that may, once again, make it a force to be reckoned with. But with the handset unit spinoff looming in the near future, will enterprise resellers tied tightly to Motorola be affected?
Matthew Thornton, a senior analyst covering mobility and wireless for Avian Securities says he expects the two companies, Motorola Mobility – the new name for the handset division—and Motorola Solutions, which will include the enterprise mobility, government and public safety businesses, to work closely and synergistically.
"The patent portfolio stays with Motorola Mobility, the handset division, but they will be licensing both the Motorola name and necessary patents to Motorola Solutions free of charge," says Thornton. "It remains to be seen how much integration there will be on the OS side of things, whether the enterprise business bets on WinMo or Android. But, Android has some catching up to do in the enterprise anyway—it’s still early."
It appears that mobile enterprise resellers with strong Motorola partnerships will remain unaffected at by the spin out for now. Plus, Thornton says, the financial health of the new Motorola Solutions business is looking to be strong. Thornton says the enterprise business is the least talked about and understood by investors, despite being the largest earnings and cash generator its government, public safety and former Symbol business.
Motorola has been on a rocky course over the past few years, struggling to find its way after the RAZR went off the market in 2007. Motorola was once the darling of the cell phone marketplace, eventually selling over 110 million RAZRs, making it one of the best selling phones of all time.
Ever since, the company has struggled to find its footing, especially in the consumer device marketplace, and trying its hardest to solidify a leadership position in the enterprise mobility market with numerous acquisitions, including scanning giant Symbol Technologies and mobile email infrastructure software provider Good Technology, which it later offloaded to Visto under an undisclosed agreement.
It seems that betting on Android was a stellar idea. Motorola sold 2.7 million phones in the second quarter, and that number is up solidly from Q1’s 2.3 million. That beat expectations. Also, The Motorola Droid follow-on, the Droid X is in high demand. Stock shelves across the country are running out. Motorola is finding some sure footing and recovery from an unfortunate long decline.
And, that’s good news. Not just for Motorola stockholders and employees, but also for the mobile marketplace. The consumerization of IT is driving multiple devices into the enterprise, and VARs playing in multiple verticals can look at Motorola as a close and cozy partner to fulfill many of its needs including ruggedized hardware, scanning, wireless switches and insight into the consumer device marketplace.