Motorola Scrapping Its mobile phone Business? Doubt It. (MOT)

Will Motorola ditch its troubled mobile phone division and focus on the rest of the company — set-top boxes, network gear, etc.? Anything’s possible, but we doubt it.

Nomura International analyst Richard Windsor, in a note summarized by MarketWatch, says that there’s speculation that Chinese equipment makers will buy Motorola’s mobile phone business. Windsor also dismisses such talk, arguing that a potential buyer wouldn’t have any better tools to fix Motorola’s (MOT) problems than current management has.

We agree. While a new owner might be able to improve Motorola’s distribution, especially overseas, its biggest problem is that its phone business has taken a backseat to rivals like Samsung, Nokia (NOK), Apple (AAPL), and Research In Motion (RIMM). That takes a full rebuilding effort: engineers, designers, management, marketing, etc. In other words, as MarketWatch notes, this is nothing like Lenovo’s 2004 purchase of IBM’s well-established ThinkPad laptop line.

Meanwhile, what’s left after a Moto mobile phone division sale isn’t a very sexy company. Set top boxes, enterprise network gear, and telco equipment are slow-growth businesses at best.

See Also: Motorola Q4: Still Searching For A New RAZR

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