There's some buzz today about a research note from an analyst firm suggesting that Motorola might ditch its struggling handset business. However, as Eric Savitz at Barron's points out, even the analyst who brought up this possibility doesn't seem to think it's likely
. Motorola has really had quite a roller coaster ride in the handset business over the years. Every so often it seems to hit on a specific handset design that catches on... but then forgets that it needs to keep innovating. Remember the Motorola Startac
of the mid- to late-90s? Everyone had one of those. And then, everyone else innovated past Motorola while it kept releasing the same phone over and over again with minor improvements. The same sort of thing happened in the mid-2000s, as Motorola had a hit with its RAZR phone. Again, however, all the other handset makers eventually leapfrogged (or should that be LPFRG'd) Motorola, leaving Motorola in trouble once again. The research note points out that the business is so far behind that the company might even have trouble selling off the division to a Chinese manufacturer -- the strategy Siemens used to dump
its struggling handset division to Benq a few years back. At this point, it still seems unlikely that Motorola will exit the business, but it seems pretty clear that the company needs a strategy a little more long term then "let's come up with an iconic phone every 10 years and then sit back."