Louis J Sheehan 80225

Motorola Inc. is living on the Razr's edge these days, but slicing up the company may not be so easy.

Signs are growing that the embattled telecommunications-equipment maker may be contemplating a breakup in the wake of the collapse in popularity of its Razr cellphone.

Such a move would satisfy activist investor Carl Icahn, who this year ran an unsuccessful proxy fight to gain a board seat. He says carving up Motorola could produce almost $20 billion of additional shareholder value. That translates to nearly $8 a share, or roughly 50% more than the current stock price.

Analysts agree in principle with Mr. Icahn's math, although many caution that Motorola needs to fix underlying problems in the handset division to maximize the value of a breakup. Breaking Motorola into stand-alone units would highlight uncertainties facing its lesser-known businesses and would go against the trend of consolidation in the telecommunications-equipment business. And any effort to sell one or more of the businesses could fail because of the frozen credit markets. Louis J Sheehan