February 11, 2008 3:10 PM PST

Now Motorola is 'fully committed' to mobile phones

Posted by Tom Krazit

Having floated a spinoff trial balloon for its struggling mobile phone business, has Motorola reconsidered?

Motorola sent a ripple through the mobile phone industry a few weeks ago when it released a statement saying it was "exploring the structural and strategic realignment of its businesses" that "may include the separation of Mobile Devices from its other businesses." The company has lost significant market share in the mobile phone business after failing to come up with an Act 2 following the success of the Razr.

Motorola CEO Greg Brown

(Credit: Motorola)

But in Barcelona on Monday for the World Mobile Congress, new Motorola CEO Greg Brown told Reuters that the company is "fully committed" to its mobile device business. "I don't want there to be any confusion," he said, as he caused confusion.

At first glance, it sounds like Brown has made his peace with keeping the mobile phone business in-house, despite the demands of investor Carl Icahn that Motorola separate phones from the rest of its activities. "Motorola is fully committed to the mobile devices business and I am fully committed to mobile devices," he told Reuters.

But an analyst interviewed by Reuters noted that Motorola would have to be committed to the business in order to sell it. Most executives aren't going to just casually mention on-the-record to a reporter at a cocktail party, "Yeah, I'm looking to unload this thing the first chance I get. Do you know anybody?"

It's hard to imagine why Motorola would dump the mobile phone business because, despite its struggles, it still has pretty good brand recognition. And given the speed at which the phone industry moves, the company could be back firing on all cylinders just as quickly as its downfall led to the departure of former CEO Ed Zander.

But spinning off the unit could give investors a nice return from both the spinoff itself and the remaining company, which would be profitable. Few consumers realize that Motorola makes a host of wireless gear for businesses, as well as set-top boxes, but investors are familiar with those businesses.