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Motorola May Sell Ailing Cell Phone Division

Company struggling against smart phone competition

By Peter Fearon,  Newser Staff

Posted Feb 1, 2008 2:50 AM CST

(Newser) – Motorola, battered by more innovative competitors in the cell phone industry, is considering spinning off or selling its flagship mobile phone division to concentrate on other parts of its business. Motorola, which once rocked the industry with its innovative StarTAC flip phone and the ultra-slim Razr, now plans to refocus on TV set-top boxes, telecommunications network hardware, police radios and walkie talkies, reports the Wall Street Journal. But a top executive emphasized Motorola itself "is not for sale."

The Motorola board has been under pressure to take decisive action by activist shareholder Carl Icahn, who owns 3.3% of the company and wants to nominate several directors to the board. "We think they are moving in the right direction, but they still have a lot of moving to do," Icahn said of the proposed division sale.

Electricians connect cables on the back of LED wall at the Motorola booth at the Las Vegas Convention Center in preparation for the opening of the Consumer Electronics Show.  (AP Photo/Jae C. Hong)
Electricians connect cables on the back of LED wall at the Motorola booth at the Las Vegas Convention Center in preparation for the opening of the Consumer Electronics Show. (AP Photo/Jae C. Hong)   (Associated Press)
A Motorola Razr cell phone at a consumer electronics store, in Gloucester, Mass. Motorola Inc.'s CEO Greg Brown spooked investors with a with a gloomy assessment of the cell phone maker's inability to turn around its ailing handset division. Now there's speculation the division may be sold or spun...
A Motorola Razr cell phone at a consumer electronics store, in Gloucester, Mass. Motorola Inc.'s CEO Greg Brown spooked investors with a with a gloomy assessment of the cell phone maker's inability to...   (Associated Press)
Kenneth Ratton of Radiant RFID holds a barcode scanner made by Motorola that will be used to keep track of evacuees in the event of a natural or man made disaster. Motorola is considering spinning off its cellphone division to focus on innovative devices like this, tv set top boxes,...
Kenneth Ratton of Radiant RFID holds a barcode scanner made by Motorola that will be used to keep track of evacuees in the event of a natural or man made disaster. Motorola is considering spinning off...   (Associated Press)
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