The business stories that matter, by Fortune's Colin Barr
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August 4, 2008, 9:47 am

Motorola sticks with breakup plan

Motorola (MOT) is sticking with its breakup plan. The struggling tech titan hired Sanjay Jha from Qualcomm (QCOM) to run the handset unit that Motorola is planning on spinning off later this year. The move, which makes Jha co-CEO of Motorola and puts him in charge of Motorola’s struggling mobile devices unit, comes just months after Motorola said it would separate the handset business from the rest of the companies, in a sop to dissident shareholder Carl Icahn.

“I welcome the opportunity to lead this company into the future,” said Jha, “while working to create a successful independent Mobile Devices company that will continue to innovate and grow for years to come.”

Critics of the splitup plan say little will be accomplished by breaking Motorola’s money-losing handset business off from its profitable networking and enterprise mobility operations. As Fortune.com’s Scott Moritz noted last Thursday, making the handset business independent now could mean higher costs and less access to resources. But by hiring a top exec from another big-name tech shop, and naming him co-chief executive alongside incumbent Greg Brown to boot, Motorola makes clear it has made up its mind. Shares rose 9% in early trading Monday.

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Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
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