According to a report in The Wall Street Journal yesterday, Motorola could be considering breaking up its business units, in a move that could be worth an estimated $20 billion.
Former CEO Ed Zander had dismissed the idea of breaking up the company, but according to the report Motorola's new CEO Greg Brown is more favorable to the idea. Activist investor Carl Icahn who lost a campaign to get himself a seat on the company's board earlier this year has been pushing the idea of a breakup.
Motorola is comprised of three business units: the handset unit, a division that works on government contracts and a home-networking business unit.
Icahn has continued to point out that the handset unit isn't contributing much to the company's overall earnings and that spinning off the division could be worth $20 billion to shareholders.
Brown and the company's new CFO Tom Meredith have not come out in favor of splitting up the company, but did tell the Journal that a "change in action" for the company may be required.
With the current economic climate, wireless operators face shrinking marketing budgets and reduced consumer spending.
Globally, the credit crunch is very much alive, and operators will be tightening their belts into the foreseeable future by putting off capital purchases.
