Motorola targets early 2011 to separate into 2 companies

Schaumburg and Libertyville will remain hubs for the two new businesses that will emerge from Motorola Inc. when it splits early next year.

The two co-CEOs removed any uncertainty Thursday as they discussed how Motorola will share its 80-year-old brand name with the two new publicly traded businesses.

The consumer-oriented Mobile Devices and Home businesses will become one company and continue to be housed at Libertyville and Horsham, Penn. The government- and business-oriented Enterprise Mobility Solutions and the Networks businesses will form the other company and use Schaumburg as its headquarters, Motorola co-CEOs Greg Brown and Sanjay Jha told the Daily Herald during an interview Thursday.

"We have several common customers and plan to capitalize on them," said Jha, now named CEO of Mobile Devices and Home.

This business will offer a converged mobile devices, digital entertainment devices for the home, as well as video, voice and data solutions.

Brown now becomes CEO of the new Enterprise Mobility Solutions and Networks business. This will focus on business and government security needs with products and solutions, including rugged two-way radios, mobile computers, secure public safety systems, scanning, radio frequency identification, and wireless network infrastructure.

Jha and Brown said how the Motorola name will be incorporated for both and other issues will be announced later.

Earlier Thursday, they told Wall Street analysts they were confident that early 2011 will be the best time to spin off the companies, since they expect Mobile Devices to become profitable later this year. The split also has the blessing of the board of directors.

Motorola announced nearly two years ago that it would split with one company including the mobile phone business.

Then on Jan. 29, Jha told the Daily Herald that Libertyville will remain an integral part of the new Mobile Devices business once it spins off. "It will remain, undoubtedly," Jha had said.

The Libertyville headquarters for the Mobile Devices offers a vital set of skills, although plans "to expand in other parts of the world to obtain other skills will be needed, too," Jha had said.

Motorola's latest announcement removes the uncertainty that has been hounding the company's work force, vendors and customers, said Mark McKechnie, analyst with Broadpoint AmTech Inc. in San Francisco.

"It's hard to move forward without coming to a decision," McKechnie said. "It's like, just put a plan in place and let's remove the uncertainty."

On Thursday, Jha told Wall Street analysts that more than $1 billion in costs have been eliminated from Motorola, and Mobile Devices is on target to launch 20 new smart phones this year.

"We've shown in a short period of time that we can compete in this marketplace," Jha said.

The separation will be done through a tax-free stock dividend of shares in the new company to Motorola shareholders. Following the separation, both businesses will be well capitalized so the companies can execute their respective business plans and be able to address future opportunities, both Brown and Jha said.

The Mobile Devices and Home business is expected to own the Motorola brand and license it royalty free to the Enterprise Mobility Solutions and Networks business.