ie8 fix

Between the Lines

Larry Dignan, Andrew Nusca and Rachel King
Home / News & Blogs / Between the Lines

Motorola's breakup in sight: Nokia Siemens buys wireless networking unit

By | July 19, 2010, 7:45am PDT

Summary: In another step toward its breakup, Motorola unloaded its wireless networking unit to Nokia Siemens Networks for $1.2 billion.

In another step toward its breakup, Motorola on Monday unloaded its wireless networking unit to Nokia Siemens Networks for $1.2 billion.

For Nokia Siemens, the purchase of most of Motorola’s wireless network infrastructure assets gives the company a better footprint in the U.S.—specifically CDMA technology and WiMax. Nokia Siemens gets access to more than 50 operators and some new sales ground to till. Motorola counted Clearwire, Sprint, Verizon Wireless and Vodafone as customers. With Motorola’s wireless assets, Nokia Siemens will be No. 3 in the U.S., No. 1 in Japan and No. 2 globally.

The deal will close by the end of the year and Nokia Siemens will take on the 7,500 employees in Motorola’s wireless unit. Motorola’s wireless unit had a revenue run rate of about $4 billion.

In the big picture, Motorola’s sale is one more step in separating its wireless handset unit, which is now best known for its Droid smartphones. Motorola plans to spin off its handset unit is expected to be complete in the first quarter of 2011. Motorola’s handset unit will be spun off tax free to existing shareholders and include mobile devices and home networking gear. Motorola will retain its enterprise—or Enterprise Mobility Solutions (EMS)—unit .

In a research note, Oppenheimer analyst Ittai Kidron said:

Bottom line, Motorola is taking more steps to separate their businesses and get fair market value—a positive. When the separation transpires, Motorola’s EMS business will be unburdened. We believe EMS accounts for most of Motorola’s stock price at current levels, emphasizing the discount of Motorola’s handset unit.

Jefferies analyst William Choi said that Motorola could have received a higher bid from joint venture partner Huawei, but political opposition would drag out the deal and delay the company’s breakup.

Related: Motorola’s Droid X could gain from HTC supply pain, Apple iPhone 4 flap

Kick off your day with ZDNet's daily e-mail newsletter. It's the freshest tech news and opinion, served hot. Get it.

More from “Between the Lines”

Topics

Nokia Corp., Network, Siemens AG, Wireless Networking, Motorola Inc., Wireless, Wi-Fi, Wireless And Mobility, Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

Related Discussions on TechRepublic

Did you know you can take part in these discussions with your ZDNet membership?
Ask a Question Start a Discussion
20
Comments
Add Your Opinion

Join the conversation!

Just In

RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
tomlin21-24319035676893835085146735905770 11th Oct
Hey ! Like your weblog many nfl jerseys usa thanks for sharing it with us. Support group company.
View in thread
0 Votes
+ -
And so on and so forth
klumper 19th Jul 2010
Chip chip chip as they slurp up corporate America and its institutions from under this country's feet. At least we have those venerable old American breweries to turn to to drown out our unemployment sorrows.

Oh wait, they've all been gobbled up by foreigners in recent years likewise, so whatever profits they make can be exported elsewhere. What was I thinking??

[slaps self to return to reality]

Ah well, at least they're providing us with plenty of free porn and other such diversions to keep us sufficiently distracted. Bread and circuses never looked so hot.
0 Votes
+ -
Motorola became an also ran on its own accord
betelgeuse68 19th Jul 2010
@klumper I'm from the Chicago area and many of my college peers (comp sci program) went to work for Motorola. Most of these people later lost their jobs at Motorola failed to adapt to reality. In talking to someone that has managed to survive many waves of layoffs, Motorola's biggest problems was the insistence to own absolutely everything on the mobile handset stack. Motorola was adamant about not adopting any technology that it did not own the intellectual property rights on. That's all fine and dandy, but when the world around you is doing it to gain leverage (aka marketshare), you better have damn good in house talent to backup such a stance, e.g., Apple. In short, Motorola did not have such talent in house.

Motorola's mistake is what I call "I-need-to-build-a-nuclear-power-plant" Syndrome. Imagine the notion of a manufacturing company building its own a nuclear power plant to generate electricity for its factory because the electric company might one day "pull the plug". Such a notion is idiotic. Yet, when you insist on absolute control rather than delegating to subject matter experts (which may not reside inside your company), you start digging your own grave.

That's essentially what Motorola was doing by not adopting outside technology when competitors were and their own in house efforts were outclassed. After massive market share erosion, Motorola got to go to Google (for Android) with its tail between its legs.

The failure to correct course in business is the downfall of companies. Motorola's plight was completely a function of poor business decisions by previous leadership. The stories I heard about the internal workings of Motorola from my old college bud are far from flattering and corroborate my observations.

Interestingly, Nokia is now in the same boat - they've been caught completely off gaurd by the rise of smart phones.
0 Votes
+ -
RE: Motorola became an also ran on its own accord
n305er 19th Jul 2010
@betelgeuse68
I think you can thank the earlier Chairman for that. That guy believed so strong that a company should be massive and owns everything. Not realizing that owning a big company without making use of the asset to earn money costs money to maintain. In the end, a lot of people lost their job and he stepped down.

I'd say Sanjay and Greg Brown is doing a much better job right now.
0 Votes
+ -
RE: Motorola became an also ran on its own accord
klumper 20th Jul 2010
@betelgeuse68 and n305er

My post wont take as rendered due to "ERROR ON PAGE" (*rolls eyes*). Look below for response.
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
fairportfan 19th Jul 2010
@klumper Perhaps the US breweries will now begin turning out decent beer, then.
0 Votes
+ -
But there's more to even that story
klumper 20th Jul 2010
@fairportfan
Perhaps the US breweries will now begin turning out decent beer, then.

LOL -- and yes, hope springs eternal with a rabbit's foot. wink

Look at bottom of thread for more as I can't place anything extra here. [too much "mysterious" syntax creates "Error on page" in reply posts]
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
lrdesiderio@... 19th Jul 2010
klumper, it's a game that americans created. As some oldies say: you make your bed, now lie in it...
It's interesting to note that years ago, Siemens decided to sell its mobile division to Benq and keep with its infrastructure division. Motorola is taking the other way.
0 Votes
+ -
Yes America created the game
croberts 19th Jul 2010
@lrdesiderio@...

And the rest of the world came and ate our lunch, and politician after politician have failed to understand this.

Support for "corporate america" seems stuck in the post -war 1950s mentality when supporting corporate America generated blue and white collar jobs. Companies were all American, the factories were all American, and what was good for the corporation was good for the country and the worker.

No politician seems to have clued in to the fact that it doesn't work that way when the factories are overseas and the company is foreign-owned. All you are left with is retail jobs selling someone else's product.
0 Votes
+ -
Bravo and well stated
klumper 20th Jul 2010
@croberts

Some still share such sentiments. Only no one that matters is listening. They've all been bought for Judas coin.
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
dhays 19th Jul 2010
Sounds just like what happened to AT&T (with a little help from the Gov't) They had a lot going for them and now look--they are owned by one of the spin off children. Once a powerful manufacturing and phone company. Many of the other spin offs are foreign owned or partnered. (e.g. Alcatel-Lucent)
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
pghammer21@... 19th Jul 2010
@dhays : Lucent acquired *Alcatel* (in fact, Alcatel was about to fold). Lucent was, and remains, decently profitable (however, it has primarily concentrated on carrier-side IT, in particular carrier switchgear, which has long been its primary business). The market is now pretty much *global*, not US-centered, in nature, and margins are determined by labor costs. The lowest labor costs are simply not anywhere in the Western Hemisphere, but in the Indu-Asian landmass (look at 3Com, now owned by HP; just about all the manufacturing is in China). The government (the US government, I mean) still acts heavily protectionist (and company shareholders, though largely American, aren't willing to put up with Congressional shenanigans and hypocrisy any more); unfortunately, barring the ability to kick the bums out, they have little option than to sell to foreign investors.
0 Votes
+ -
WTF
Jimster480 19th Jul 2010
Seriously? Sold its wireless network division? Isn't that the division that builds their phones? Why would they sell their division now that they are finally on the rebound... Corporate America isnt even Corporate America anymore. Its more like Corporate other peoples countries. With many of our main companies being owned by companies from other countries. This is getting ridiculous.
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
betelgeuse68 19th Jul 2010
@Jimster480 No Jimster. Motorola sold the that division produces equipment for the telephone companies to handle phone calls.
0 Votes
+ -
RE: Motorola became an also ran on its own accord
klumper 20th Jul 2010
@betelgeuse68 and n305er

Interestingly enough, my uncle worked for Motorola in Chicago for his entire adult life as an in-house repair technician. He retired some 10 years or more ago, and still resides in the outlying suburbs. With me being on the west coast and considerably younger, I've yet to pick his brain sufficiently regarding his days there. I do know however, he felt a certain kinship toward the company that provided him a lifelong career, and of course its fabled past.

There was a time Motorola turned out solid products that lasted many years. They hired American technicians almost exclusively while providing long term careers for those who made the grade. They also built the majority of their products on domestic shores, while maintaining manufacturing centers that spanned generations. So where has all that gone? Like the mill and steel factory that framed so many towns of yore, it's gone gone gone.

I will say one thing though, which attests to the observations you both have made. Motorola fell behind somewhat in their business acumen and practices in recent times, never fully appreciating the sagacity of running lean while maintaining low overheads, shades of the complacency Zenith (now LG Electronics of South Korea), RCA (now Technicolor SA of France) and many other American electronics powerhouses suffered before them.
0 Votes
+ -
ERROR
klumper Updated - 20th Jul 2010
ON

PAGE
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
d,duffer@... 20th Jul 2010
I have a Question,what happens to all the phones under Motorolora name? Will there be some kind of trade in that would let you get a Credit or some kind of break for another compatiable phone that will work in the Nokia Industries???? Please if anyone can answer this question, I would greatly appreciate it....Thanks Very Much;
David D. BG KY
0 Votes
+ -
But there's more to even that story
klumper 20th Jul 2010
@fairportfan
Perhaps the US breweries will now begin turning out decent beer, then.

Touche. A good brew from so many other parts of the world puts our gut suds to shame. Even a simple Heinekens or Becks - not the best offerings from Europe by far - relegates American lagers to woefully short wannabes. To think of what the Germans, Dutch, Belgians and even English turn out, ours by contrast damn near amounts to flavored barley water (some say bilge).

But the full story is more complex. American lagers were actually recognized as "world class" once upon a time. Considering most if not all came from German brewmeister emigrants, this only stands to reason. It was the prohibition era (with government intervention) coupled with the "war years" a decade later (and but more government intervention) that lead to the demise of nearly every brewery in America. In their wake came the establishment of the "Big Three" brew houses.

It's a ragged story spun around the depression years and its crippled economy, and a prohibition (and later GI) public unaccustomed to flavorful beer. With heavy handed governmental "assistance," it's what brought American lagers to the watered down, frightfully inept level they ultimately succumbed to. Fortunately, contemporary microbrews across the country save the day in part -- but of course the new dynamos come at extra cost.

All that said, tell me you haven't enjoyed an iced down gut swill on a parched throat at some point through the years. wink
0 Votes
+ -
I was blinded by MOTO-love; by J.Yarbrough
yarddizzle 18th Aug 2010
I've always carried, used, and relied on a Motorola Handset going back to when the "Brick" modular cellular phone system was released! Through them all, StarTec, Timeport, RAZR, Pebble, a few others and now the current smartphone, the i1, can't even get the support it needs due to transitional barriers? C'mon MOTO, where's the love & loyalty like that of which I've shown you for close to 20 yrs now??? We i1 customers demand an ETA for the upgrade to Android 2.1 (or will it be 2.2 by the time the BS has been shoveled away???) we've answered your call for demand and now the ball's in your court...WHAT ARE YOU GONNA DO??? Leave us hangin'? Might as well...our gov't is a big advocate of that. Sheeshz...
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
jackson1984-24316069205748857739440257893812 11th Oct
Huge purpose! You really individual the experience nfl football shop of imaginative building. I individually cherished the summarization specifically the precise circulation of wonderful hints.
0 Votes
+ -
RE: Motorola's breakup in sight: Nokia Siemens buys wireless networking unit
tomlin21-24319035676893835085146735905770 11th Oct
Hey ! Like your weblog many nfl jerseys usa thanks for sharing it with us. Support group company.

Join the conversation!

Formatting +
BB Codes - Note: HTML is not supported in forums
  • [b] Bold [/b]
  • [i] Italic [/i]
  • [u] Underline [/u]
  • [s] Strikethrough [/s]
  • [q] "Quote" [/q]
  • [ol][*] 1. Ordered List [/ol]
  • [ul][*] · Unordered List [/ul]
  • [pre] Preformat [/pre]
  • [quote] "Blockquote" [/quote]
ie8 fix

The best of ZDNet, delivered

ZDNet Newsletters

Get the best of ZDNet delivered straight to your inbox

Facebook Activity

Blog Roll

Blog Archive

White Papers, Webcasts, & Resources
ie8 fix