1/28/2008 10:24:00 AM
'Chinese would buy Motorola handset division'
Motorola may have to sell its handset division to stop the rot and turnaround the problems behind a £195 million loss announced last week.
Chinese handset manufacturers are expected to be first in line to snap up the business if the management decides to sell the division, which analysts blame for holding back the group.
‘Given the length and depth of the handset problems, it's increasingly difficult to see why shareholders should see logic in keeping the divisions together. Are there really valuable synergies between the other divisions and a handset business that is in such difficulty? Or would it be better to break the company up?’ said Martin Garner, mobile director at Ovum.
Ovum believes a joint venture would be more likely than a straight sale, and other analysts believe Motorola’s handset business could be snapped up quickly.
‘I think if they can’t fix it, de-merger of the handset business has to be an answer,’ Richard Windsor from Nomura Research said. ‘The Chinese would definitely be in the frame for taking on Motorola’s handset business. It would give them the one thing they lack – technology.’ Possible buyers could be Huawei or ZTE, he added.
The poor range of handsets compared to other manufacturers was blamed for the problems of the handset division. However, selling the business would be a massive step, as it makes up half of group sales. ‘You would be talking about changing the face of Motorola,’ said Windsor.