It’s no secret that Motorola is planning to split into two separate companies during the first quarter of next year. The handset division, which has been struggling to recapture their glory days of yore when the RAZR was the must have mobile phone on the market, will continue pumping out mobile phones. The networks side however, the part that makes equipment that operators buy when building out their networks, is rumored to have been sold to Nokia Siemens Networks for $1.2 billion. The sale is supposed to be announced today according to The Wall Street Journal.
Further rumors state that Huawei, the Chinese infrastructure vendor who competes with everyone by slashing their prices to the point of lunacy, was also interested in Motorola’s network division, but the American government wasn’t too comfortable with the sale. Relations with the Chinese are tight, not only in America either; recently the Indian government told local operators that they’re banned from buying equipment from Chinese vendors.
But back to this Motorola and Nokia Siemens Networks story, what is there to be gained for both parties? Motorola’s handset division needs the money from this sale to keep on chugging along. The Droid was a success, but they’re going to need a string of successes like that to keep on thriving in today’s fiercely competitive market. Nokia Siemens Networks needs to penetrate the American market, badly, and this is one way of reaching towards that goal. It’s a crude technique, and they’re not going to be picking up much new technology, save for maybe some things related to CDMA, so … I really can’t see the point.
Some analysts I’ve spoken too have long been waiting for Nokia to spin off Nokia Siemens Networks as a separate company. Investors should have a choice if they want to buy shares in a company that either A) makes mobile phones or B) makes network equipment. Should Nokia do what Motorola is planning to do and split in two? That would make far more sense. Combine those two halves and you may have something worthy enough to be deemed awesome.
Or not.