Motorola sheds email unit

Mobile handset manufacturer Motorola is selling its mobile email unit, Good Technology, to Visto, a competitor of Research In Motion (RIM) in the mobile internet space. Though the companies are not revealing financial details, analysts say Visto is most likely paying much less than the estimated USD500m it cost Motorola to acquire Good Technology in 2007.

The sale is part of Motorola’s measures to cut costs at its struggling handset business. When it acquired Good Technology, Motorola was the second largest handset maker in the world. It is now the fifth largest.

The Good Technology deal has the added advantage of sparing the firm a potentially costly legal battle with Visto. In 2006, Visto filed a lawsuit against Good Technology alleging that a number of its products, including its signature GoodLink push e-mail server, infringed on Visto's patents.

Motorola sells mobile internet services in the US through mobile operators AT&T, Sprint Nextel and Verizon Wireless. Both Good Technology and Visto lag far behind RIM, the market leader in mobile email services.

Though Motorola is shedding the email unit, analysts say the provision of mobile email will remain central to its business plan. Motorola is said to be developing a new range of smartphones with support for mobile internet and social-networking applications. The strategy is aimed at profiting from the lucrative smartphone sector, which is bucking the trend of the wider mobile handset market and continuing to grow.