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Motorola May Sell Or Spin Off Cell Phone Division

Motorola--which has been the largest and most successful cell-phone manufacturer in the U.S. largely on the back of its Razr--says it is considering separating the cell-phone division from the rest of its businesses, possibly through a sale. Motorola has failed to produce a best-selling phone that could match the allure of the Razr, which debuted in 2004.

The unit tumbled last year from No. 2 in the world behind Nokia to No. 3 behind Samsung Electronics. It has negative margins; scant toehold in the sizzling market for third-generation phones that download photos, videos, and other data at high speeds; and consequently, diminishing market share.

Still, it's not out of the question that one of Motorola's chief rivals could pounce. Possible suitors include LG Electronics--currently the world's No. 5 cell-phone maker--and several smaller Asian hardware players such as Huawei Technologies and Lenovo Group, which recently bought IBM's PC business. Private equity players are also logical candidates, analysts say.

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