Motorola
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Motorola, Inc. was an American telecommunications pioneer founded in 1928 by the Galvin brothers, selling car radios in the 1930s, TVs in the 1940s and cell phones in the 1980s. After the Razr's success faded, the money-losing mobile devices division dragged the company down: Motorola lost its number-two spot in handsets to Samsung and its market value fell 60% to about $22 billion. On March 26, 2008 the board approved a plan to split into two publicly traded companies; the split took effect on January 4, 2011, creating Motorola Mobility (mobile phones, later Google then Lenovo) and Motorola Solutions (government and enterprise). Motorola never went bankrupt.
02 / Motorola FAILURE REASONS
Failure reasons
Motorola's downfall was the classic one-hit-wonder trap. The Razr made it a giant, but the company failed to recreate that success: successors like the Razr 2, an iTunes phone and Windows Mobile smartphones never took hold, sales cratered, and inefficient manufacturing meant that when sales shrank, losses piled up quickly. Pressured by activist investor Carl Icahn, Motorola crafted a plan to spin off the money-losing handset business in March 2008 — but the phone business tanked further and investors would not value a huge-loss unit, so the split was postponed until 2011 while CEO Sanjay Jha (hired from Qualcomm) pivoted the handset unit toward smartphones such as the Droid and Cliq.
03 / EVENT HISTORY
Events in the structured record
- Company founded
The Galvin brothers found Motorola (as Galvin Manufacturing Corporation); it sells car radios in the 1930s and TVs in the 1940s.
- Split approved
On March 26, 2008 Motorola's board approves splitting the company into two publicly traded companies, spinning off the ailing mobile devices division; activist investor Carl Icahn pressures the board.
- Split completed
The split takes effect on January 4, 2011: Motorola Mobility (consumer phones and set-top boxes) and Motorola Solutions (government and enterprise).
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Motorola never filed for bankruptcy; its 2008 event was a corporate restructuring. The mobile devices business was valued at about $2 a share or $4 billion at the time of the split announcement, and the company's market value had fallen 60% to about $22 billion. No audited loss figure with disclosed subject, period and basis was extracted from available coverage — the $22B decline is a market-value loss, not an audited net loss.