Motorola Sets Its Phone Unit Free

By Roger O. Crockett

March 27, BusinessWeek

Motorola's mobile-phone business has turned from dynamo to disaster in just a few short years. With no hot products to follow its popular Razr, the onetime industry leader has rapidly lost market share and sales. The situation has grown so rocky that CEO Gregory Q. Brown has struggled to find a qualified executive to run the business—or any viable bid to acquire it.

But Motorola's move on Mar. 26 to spin off the mobile-phone unit could change the division's fortunes. The Schaumburg (Ill.) company plans to set up the business as a separately traded public entity, and the board has retained executive search firm Russell Reynolds Associates to recruit a new CEO for the company. Brown is now likely to find it much easier to attract a top-flight candidate, since the new chief will have a free hand. "That changes the dynamics of the search," says Peter D. Crist, head of executive recruiter Crist Associates in suburban Chicago. "Top execs at key players such as Nokia and other rivals would not have been interested [if the phone unit were not separate]. Suddenly they perk up and say: 'I can run that business.'"

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