Motorola formally split into two companies

NEW YORK - Motorola, the 82-year-old consumer electronics pioneer responsible for early televisions, cell phones and even the first broadcast from the moon, split into two companies Tuesday in a reflection of changing markets.

As separate companies - Motorola Mobility, targeting consumers, and Motorola Solutions, for professionals - the two will have simpler stories to tell investors and a nimbler approach to developing cutting-edge products such as tablet computers.

The consumer unit includes a Horsham operation that distributes cable-TV equipment.

Shares of Motorola Mobility climbed $2.88, or 9.5 percent, to $33.12 in its first day. Motorola Solutions was unchanged at $39.77. Both trade on the New York Stock Exchange.

Sanjay Jha, chief executive of the consumer-focused Motorola Mobility Holdings Inc., said in an interview that the new company will benefit from a narrower focus, all the way up to the top management and the board of directors.

"I think you'll see a board that is much more focused on understanding technology as opposed to managing a portfolio of products," Jha said.

For decades, Motorola products told the story of the march of electronics into the hands of consumers: car radios in the 1930s, TVs in the 1940s and cell phones starting in the 1980s.

The company also expanded into police radios and barcode scanners aimed at government agencies and large businesses. These divisions complicated the picture Motorola painted for investors; now, they make up the second company, Motorola Solutions Inc.

While Motorola's professional business soared, its cell-phone business fell into a years-long slump as sales of Apple Inc.'s iPhone and other smart phones took off. The company's cell-phone division once enjoyed strong sales thanks to the Razr, a slim, clamshell-style feature phone that debuted in 2004 and became a best-seller.But Motorola could not repeat the Razr's success as consumers began flocking toward smart phones such as the iPhone. Motorola's manufacturing process also yielded smaller profits than competitors earned, so when cell-phone sales dwindled, its losses loomed that much larger.

The divisions that became Motorola Mobility - namely cell phones and cable set-top boxes - had $2.9 billion in sales in the most recent quarter, compared with $1.9 billion for the Motorola Solutions segments. But the $321 million in operating earnings at Solutions was much stronger than Mobility's $3 million.

Last fall, Motorola said the cell-phone unit was profitable for the first time in three years, in part to a focus on smart phones such as the Droid.

Solutions will stay in Schaumburg, Ill., while Mobility will take up a temporary home in nearby Libertyville, Ill.