Motorola plans to separate its struggling handset business from its other operations.
The Schaumburg, Ill., company has been under pressure from billionaire investor Carl Icahn to make changes to revitalize its cell-phone business.
Motorola said Wednesday it will split the handset business from a separate company that will encompass its home and networks business, which sells TV set-top boxes and modems, and its enterprise mobility solutions, which sells computing and communications equipment to businesses.
Chief Executive Greg Brown says the move will provide "more targeted investment opportunities for our shareholders."
Motorola shares rose 5 cents to $9.81 in premarket trading.