Two years and a turnaround since first being mooted for spin-off, Motorola’s handset division will be demerged in Q1 2011 with a cash cushion of $3.5bn.
Q2 earnings at Motorola suggested that Motorola co-CEO Sanjay Jha has turned around the company’s handset business.
When Jha took over at Motorola in 2008, it had been planned to dispose of the handset business. However Q308 losses of $840m made a successful sale unlikely.
Q2 2010 revenue from the handset business was $1.72bn for operating earnings of $83m and an operating loss of $109m.
In H1 2010 the net loss was $132m compared to $885m in H1 2009. H1 2010 sales topped $5bn. Jha now expects the unit to make a profit in Q4.
When he took over in the summer of 2008, Jha could have wound down the business, getting what he could for its constituent parts but, instead decided to put an estimated $500m to $1bn into new product development to get the cellphone division back to being saleable.
Betting on Android, Jha brought out the Motorola Droid in Q409 and it sold well. Droid’s successor, Droid X, lwas aunched in July 2010 and, last month, the successor to Droid X, Droid 2, was launched.