In an article about Motorola’s lousy financial prospects, the Wall Street Journal’s Sara Silver hides the real news in the third paragraph: HP exec Todd Bradley, Moto’s favourite candidate (of two finalists) to become CEO of its to-be-spun-off mobile phone division, has pulled out of the race, according to unnamed sources.
This is more bad news for Motorola (MOT), which has been floating the idea of spinning off its mobile phone business since late January, and has yet to find someone to run it. As former CEO of PalmOne, now Palm (PALM), Bradley is perhaps best known for acquiring Handspring, whose Treos once drove the smartphone market. He currently runs HP’s (HPQ) PC/mobile device/TV/Internet services division.
Then again, after reading Silver’s article, we can’t blame Bradley for passing. The quick version: Motorola is burning cash, needs more, and will probably have a hard time getting it. Its profitable businesses — wireless gear, set-top boxes, etc. — would be left saddled in debt, and the messy breakup itself will probably hurt their profitability. (Carl Icahn, who pushed the spinoff in the first place, is probably down $600 million on his $2+ billion investment, WSJ estimates. Bad run for Carl these last few weeks.)
So what’s left? A mess that will take smart, patient management, some luck, and a long time to fix. And as Apple (AAPL) and RIM (RIMM) eat the high end of Motorola’s business, and LG, Samsung, and Nokia (NOK) the mid-to-low end, time is not on Motorola’s side.