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"If it gives them more focus to develop devices that are revolutionary I'm all for it," said Alex Zaltsman, co-founder and managing partner of Exigent, a Morrisville, N.J.-based solution provider.
According to Zaltsman, Motorola had become too big for its own good and the mobile devices division didn't get the attention it needed to flourish.
"I think this will give them focus and they can develop more innovative products," he said. "They need to be focused on innovation. In the age of the iPhone and the new BlackBerry devices, they need to get back to where they were years ago."
Zaltsman said new and innovative offerings from Motorola's Mobile Devices business would help him not only sell more devices and solutions to his customers, but it would also drive the demand for more services, helping him increase revenue. He said the last great device he can recall from Motorola was the original Q smartphone, which started shipping in 2006.
"The Q was big," he said. "That was a big device for them. We sold a lot of them. They really have to come out with something that captures that excitement. I hope this separation will be more conducive to that."
The separation announcement comes just two days after billionaire investor Carl Icahn, Motorola's second-largest shareholder, sued the company demanding that Motorola turn over records pertaining to the struggling Mobile Devices business and documents detailing the use of a corporate jet by top Motorola executives and their families. Icahn claimed Motorola's device business was lagging because of poor guidance by the board of directors and wanted to view documents that offered insight into the devices business' direction.
"Over the past 12 months the statements and predictions of Motorola's management and the Board about the Mobile Devices business have too often proven to be wrong," Icahn wrote in a statement. "We want to ascertain what the board could have done in the exercise of its fiduciary duty to assure Motorola stockholders that Motorola's statements and predictions were not incorrect and would not provide Motorola stockholders with an inaccurate perspective on the prospects for the Mobile Devices business."
Icahn's suit asked for materials such as board and committee meeting minutes relating to the service and selection of senior officers; the prospects or strategy of the Mobile Devices business; and the realignment of the business, including a potential spinoff of the mobile devices business. Icahn had said he was in favor of a spinoff. The financier, who owns 6.3 percent of Motorola's shares, also requested documents released to the media and in conference calls pertaining to improvements or changes in the mobile devices business which haven't come to fruition. Lastly, Icahn demanded documentation detailing the use of Motorola's corporate jet and other property by senior management, board members and their families.
In a letter dated Monday, Icahn detailed a situation that has "gone from bad to worse," noting that this year was supposed to be a successful and profitable year in mobile devices with the potential to achieve 10 percent operating margins in the near future. Instead, Icahn said, it has become a "stockholders' nightmare." He urged stockholders to vote for new directors of Motorola at the company's May 5 annual shareholders meeting.
Icahn said he plans to use the materials he obtains through the lawsuit as part of his ongoing battle to win four seats on Motorola's board. Icahn has nominated former Viacom CEO Frank Bondi, WR Hambrecht & Co. founder and CEO William Hambrecht, MIT professor and semiconductor materials processing expert Lionel Kimberling and Icahn Enterprises CEO Keith Meister for spots on the board.
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