Motorola's business in China was overhauled as the US handset maker Tuesday formally spun off its consumer-targeted business after years of planning.
Motorola Inc formally changed its name to Motorola Solutions Inc, starting trading Tuesday on the New York Stock Exchange (NYSE) under the ticker symbol MSI, while the spinoff Mobile Mobility Holdings Inc began trading on the NYSE under the ticker symbol MMI, the two companies announced in their respective statements Tuesday.
Motorola Mobility will focus on consumer-oriented mobile devices, while Motorola Solutions will provide what it calls next-generation communications solutions for businesses and governments.
Meng Pu, formerly Motorola China president will lead Motorola Mobility in China, Miao Yi, Motorola Mobility China Corporate PR Manager, told the Global Times Tuesday.
The top executive for Motorola Solutions in China has yet to be identified.
Industry watchers said the spinoff indicates that Motorola will focus on the strategic significance of its mobile-device business, which is in line with growing demand for smartphones in China.
"Motorola bet on Google's Android operating system to salvage its mobile device business and succeeded. The split shows it would continue to focus on smartphones as the growth engine (for its mobile business)," said Wang Yang, director of China Research at research firm iSuppli in Shanghai.
Motorola's mobile business, for the first time in three years, turned a profit in the third quarter of 2010, contributing $3 million in operating profits, compared to a loss of $183 million in the previous year, according to Motorola's third-quarter financial report released in October.
Smartphone shipments totaled 3.8 million units in the third quarter last year, more than 40 percent of Motorola's total handset shipments.
"Mobile devices enabling access to the mobile Internet have become trendy in China. The separation would help streamline Motorola's corporate structure, which has been too bulky to be flexible in China's market," said Ji Chendong, a consultant with market research firm Frost & Sullivan in Shanghai.
China's smartphone sales are estimated to reach 30 million units in 2010, and the figure is expected to hit 50 million this year, according to iSuppli's Wang.
Motorola Mobility is expected to launch more smartphones using the Android operating system this year to retain a foothold in the market, Frost & Sullivan's Ji said. By the third quarter of 2010, sales of Android smartphones in China totaled 8.61 million, more than double from the previous quarter's 3.94 million units, the fastest-growth among all operating systems, according to Beijing-based research firm Analysys International.
Motorola will maintain a leading position in the market niche, but won't easily gain a bigger market share given tight competition from its rivals including Samsung and HTC, Wang pointed out.
