Moto selling assets to keep handsets afloat

Beleaguered US vendor Motorola has started offloading its non-core assets as it concentrates on getting its troubled handset unit back in shape.

Late Friday, the US vendor said it had struck a deal with industrial technology provider Emerson to sell its Embedded Communications Computing (ECC) business for $350m in cash.

Motorola’s ECC business, which recorded revenues of approximately $520m in 2006, develops embedded computing platforms for infrastructure and equipment manufacturers in telecoms, medical imaging, defence and aerospace and industrial automation. The business has approximately 1,100 employees.

The primary purpose of embedded computing is to control machines or other computer systems and manipulate data. In the telecoms world, embedded computing consolidates, translates, routes and monitors voice, video and data information across multiple networks. It’s found in everything from local and long distance fixed line platforms to wireless base stations.

The cash will go toward whipping the company’s handset division back into shape. Motorola reported that net loss for the second quarter plummeted to $28m, down from a profit of $1.4bn in the same period last year. Revenues dropped from $10.8bn a year ago to $8.7bn, as the company’s mobile handsets unit continued its downward trajectory.

Motorola shipped just 35.5 million units during the second quarter, down from 51.9 million in the same period last year, slipping from second place to third as Samsung overtook in terms of handset market share. So far this year, the firm has eliminated 7,500 jobs.

Ed Zander, chairman and chief executive officer of Motorola, said: “We regularly evaluate our company’s portfolio to ensure alignment with our core vision and business strategies to enhance shareholder value. We believe that Emerson has the proven track record to continue to serve ECC’s customers with the same high quality and level of products and services. We have the highest regard for the talented and dedicated ECC employees and are confident they will be a welcome addition to the Emerson team.”