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Gregg Early, a leading technology expert and editor of The Real Nanontech Investor, explains, "Well, it’s finally happened; under mounting internal and external pressure, has spun off its handset business." Here's his update on the stock.

"Motorola’s handset division has been lost in the desert since the successful launch of the Razr a couple years ago. Since then, it’s lost market share and has been less than imaginative in developing new mobile handsets. This kind of product pipeline strangulation isn’t unusual at Moto.

"In the 1990s, the company almost went under because it couldn’t quite figure out how to exploit all the great work it was doing in its labs. Getting products to market seems to escape this company.

"It looked like mobile phones were a sector where Moto could make big inroads, and the 'lab to fab' pipeline was working very well—for a few years. Now the No. 2 mobile phone maker is No. 3, having lost its spot to relative newcomer Samsung. And even No. 3 isn’t secure if something doesn’t happen quickly.

"This has been one of activist investor Carl Icahn’s claims regarding the company. Carl Icahn had picked up about 6% of the company, and wanted to shake things up. Moto is sitting on piles of cash; it has a world-class R&D program, and apparently no one who wanted to do anything bold or even business-like with either.

"At first, it was about using some of the cash lying around to go buy something like Palm, a company that was on the ropes but has a great operating system and had successfully maintained a faithful customer base.

"Management continued to stonewall Icahn’s efforts to do something different, and it plowed forward buying complementary systems for its enterprise and cable businesses.

"As can be seen in last year’s numbers, that strategy led to major losses, including the No. 2 spot in the mobile phone market. The CEO resigned in December, and Greg Brown has been working diligently to sort out the mess without simply caving into Icahn’s wishes.

"The first thing he did was rip management out of the mobile phone division and actually has been running the division himself. I thought that was an excellent decision, especially because Icahn was gathering his forces to mount an offensive at the recently held annual meeting.

"Brown could make his own assessment of the best way to deal with the mobile division: Cut it loose or rebuild it. The Mobility Devices unit will now be split off from the Broadband & Mobility Solutions division.

"There has yet to be a determination on how the stock will split between Moto and the new stock or how operations and funding for the new company will be handled. But this is a step in the right direction. Moto needs a kick in the pants, especially because investors have been kicking it in the head for so long.

"This is one of the last great US technology companies and has always had so much going for it, but never could get the corporate side correct long enough to sustain its success.

"It seizes the market for a product or technology only to let it slide through its fingers, choosing to play it safe once it succeeds instead of continuing to push out innovative products. Once on top, management has tended to play not to lose.

"That isn’t a recipe for long-term success, and it shows in the cyclicality of the Moto business model. It also means you lose a lot of talent during those dips and must constantly reorganize.

"Brown’s move here may be the first step in getting the company out of the newest hole it’s dug for itself. At least it will buy the company time in the eyes of institutional investors who have become impatient with the tepid response to the company’s flagging fortunes.

"It will still be some time before Moto is out of the woods and much more time before any of Brown’s efforts can be termed a corporate turnaround. Caution is the word; optimism is at least a couple quarters away.

"Also, it will be interesting to see what happens now that Icahn has more access to management and whether his board appointees make the cut and make a difference.

"It’s certainly an exciting story, and I’m guessing a very rewarding one for intrepid investors who are a little sentimental about homegrown tech companies."