At least one industry watcher has welcomed Motorola's decision to split itself into two parts as a good move.
But I have seen nothing to alter my belief that merger or acquisition will be the most likely outcome for Motorola's troubled handset business.
Analysts seem to think that by splitting a large business into two smaller businesses it instantly makes it easier to run. This is something I just don't get.
Surely, you split a business into two parts to separate a weak business from a strong business. The strong business then has the chance to survive, but the weaker business is still weak.
In this case the mobile handset business is the weak one.
It is hard to interpret Motorola's decision as none other than the start of a long term strategy to exit the handset business.
Why is this? Well, some observers would have us believe that its 3G technology and handset strategy is not good enough. Perhaps, only the Motorola management know the truth of this.
So what would a buyer, and I still Qualcomm is the most likely bidder, want from Motorola? The brand is still valuable and the customer base, particularly in the US, still desireable.
For an independent handset business to survive will require a large investment from the private equity sector, as happened with Freescale. But can anyone be sure the will is still there in these "credit-crunch" uncertain times?
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