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Motorola, which entered American consciousness in 1939 with the first commercially successful car radios, has become known in recent years primarily for its stylish Razr cellphones. The Razr's success was a huge boost to the company, but the failure to come up with a convincing second act set in motion a chain of events that led Motorola to split itself in two.
In the split, announced on March 26, 2008, the cellphone division was spun off. The company's other two units -- set-top boxes and communications equipment for businesses -- are smaller but profitable.
The company was under pressure from the investor billionaire, Carl C. Icahn, who led a fight against the company's management, saying it had not done enough to increase the share price. While he was unsuccessful, his complaints prompted, in part, the departure of the chief executive, Edward J. Zander, in late 2007.
The new chief executive, Gregory Q. Brown, played down the role of Mr. Icahn. He said the main issue facing the company was its inability to come up with new products to replace the highly successful Razr.
As of 2009, Motorola's cellphone sales are now falling almost 50 percent a year. In the first quarter of 2009, the company said mobile device sales dropped to $1.8 billion. Once responsible for half of the cellphone sales in the world, its share of the market has plummeted to 6 percent.
Industry analysts are questioning not whether Motorola will again become dominant but whether the handset division will survive.
Sanjay K. Jha, Motorola's co-chief executive who was brought in from Qualcomm in 2008, still contends he can fix the handset business. He said that for now, he was not interested in market share or hit products but with break-even performance.
This is a seemingly modest goal for a company that has strong brand recognition. But new tough competitors like LG, Samsung and Apple have transformed the market with phones that can do anything a computer can do and more.
Analysts and investors are beginning to ask whether the cellphone industry can continue growing. The challenge is both simple and daunting: how to expand when more than half of the six billion people on the planet already have phones.
