News of the split of the Mobile Devices unit from the Broadband and Mobility Solutions business has sent share prices up around five per cent.
Gartner research vice-president Leif-Olof Wallin said the news would take the emphasis of the manufacturer’s products and marketing activities and further fuel “a negative spiral”.
Said Wallin: “It looks like none of the other handset vendors have showed sufficient interest in acquiring Motorola’s handset business which indicates that the divestiture might take some time. Competitors, most notably Samsung, Nokia and LG will probably gain the most during this period.”
Others suggested that the move could see an Asian handset manufacturer swoop in to tap into the US market.
Motorola, now ranked third in the global handset market, said the split would take the form of a tax-free distribution to its shareholders and expected it to be completed in 2009. The company has already started to look for a new head for its mobile devices business.
Motorola chief executive Greg Brown said: “We expect this action to enhance recovery in mobile devices and accelerate efforts to attract a new leader.”
Motorola shares have fallen more than 60 percent since October 2006, amid criticism for failing to produce a credible follow up to the initially successful RAZR handset.