NoMo Moto? Is Motorola's Cell-Phone Business Worth Buying?

Motorola said today it’s exploring strategic options that include selling its handset business. The news comes on the heels of the company announcing a terrible fourth quarter, thanks to continued weakness in the handset business.

razrburn.gifAny buyer should look carefully at Motorola’s handset business. By putting it up for sale, Motorola is admitting that the handset division is operationally weak, and to some extent, beyond redemption.

The overreliance on RAZR, and later its inability to get out of the rut of producing phones that never became “hits,” proves that the bureaucratic poundage was weighing the company down. Even if it was operationally sound, the company would need some vision to get back on track and fight it out with the likes of Nokia, Samsung, LG and newcomers likes Apple.

It is a hard fall for a once-proud company, which along with Nokia and Ericsson made up the triumvirate that controlled the wireless business with an iron fist. In order to understand how badly Motorola has stumbled, compare its daily sales of roughly 454,000 with Nokia’s daily sales of 1.3 million.

Recently, companies like Alcatel and Siemens have sold off their handset businesses to Asian handset makers. Those deals didn’t work out too well for the buyers, though. Buyers beware.

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