Pioneer Motorola moves into 21st century as two

NEW YORK - Motorola, the 82-year-old consumer electronics pioneer responsible for early televisions, cell phones and even the first broadcast from the moon, split into two companies Tuesday in a reflection of changing markets.

As separate companies -- Mobility, targeting consumers, and Solutions, for professionals -- the two will have simpler stories to tell investors and a nimbler approach to developing cutting-edge products such as tablet computers.

Sanjay Jha, CEO of the consumer-focused Motorola Mobility Holdings Inc., said the new company will benefit from a narrower focus, all the way up to top management and the board of directors.

"I think you'll see a board that is much more focused on understanding technology as opposed to managing a portfolio of products," Jha said.

For decades, Motorola Inc.'s products told the story of the march of electronics into the hands of consumers: car radios in the 1930s, TVs in the 1940s and cell phones starting the 1980s.

The company also expanded into police radios and barcode scanners aimed at government agencies and large businesses. These divisions complicated the picture Motorola painted for investors; now, they make up the second company, Motorola Solutions Inc.

With the breakup comes a shrunken bureaucracy, which both companies hope will help them make faster decisions and compete better.

As part of the breakup, Motorola is selling its cellular network equipment division to Nokia Siemens Networks, a Finnish-German joint venture.

Wireless carriers have consolidated into larger companies and prefer to deal with only a couple of equipment vendors each, leaving few opportunities for a small vendor like Motorola that wasn't dedicated to making network gear. The point of one company making both cell phones and the equipment that connects their calls has diminished as the technology has become standard.

Motorola's cell phone division once enjoyed strong sales thanks to the Razr, a 2004 feature phone that became a best-seller. As recently as 2007, cell phones accounted for two-thirds of the company's revenue. But without a blockbuster smart phone, the division fell into a slump that lasted until the most recent quarter.

In 2008, under pressure from activist investor Carl Icahn, Motorola set the breakup in motion. It hired Jha, then the chief operating officer of mobile chipmaker Qualcomm Inc., to strengthen the declining phone business. A turnaround is now underway, with a focus on smart phones such as the Droid that run Google Inc.'s Android software.

Motorola shareholders of record Dec. 21 received one share of Mobility for every eight shares of Motorola Inc. they already held and one share of Solutions for every seven shares of Motorola. People who already owned shares in Motorola had been trading stock in the newly formed companies on a "when issued" basis for almost a month. Those trades became official Tuesday.