Despite its the popular association with cell phones, Motorola actually has more sales in its non-handset businesses, which include TV set-top boxes, business and network equipment, and government communications products. J.P. Morgan Chase and Goldman Sachs are advising Motorola on the possible sales, the paper reported.

For years, Motorola has been weighing the possibility of splitting up its three main businesses: mobile phones, enterprise mobility, and home and networks mobility. The company had hoped to spin off the mobile business once before, but that effort failed.

"I think they want to get rid of anything that's not truly mobile," Kelleher said. "And they're probably thinking, 'These are commodity products and pretty soon the Chinese will be making them for nothing,'" he said, referring to its set-top and business products.

"They just seem so determined to do something structurally," Kelleher said. "I think they're just casting about."

Droid's Buzz Belies Billions Lost

But Kelleher said any such breakup would "orphan" some of the businesses -- including strong units like the government first-responder business, or its barcoding business, for which Motorola paid some $4 billion in 2006 when it bought Symbol Technologies.

The analyst pointed out that if only the handset business remained, Motorola would be the only independent manufacturer among the top six handset vendors, including Apple, without a diversified business or a wealthy parent. Nokia has an Internet service and networking business, while Sony Ericsson is a joint venture between the two giants. Samsung, of course, is a heavily diversified corporate conglomerate. Motorola would be on its own, and thus would be more vulnerable to a takeover if the recession continues or worsens.

Last month, Motorola reported its second consecutive quarterly profit. The company is currently enjoying good buzz about its new Droid handset. But the company has lost $4 billion over the past two years, and shed some 8,000 workers since December 2008. Motorola's global mobile-phone market share fell by almost 50% in the second quarter of 2009 to a very thin 5.6%, according to research firm Gartner.

A Motorola spokesperson declined to comment on what she called "rumors and speculation."

"Separation into two independent, publicly traded companies (Mobile Devices and Broadband Mobility Solutions, which comprises of Enterprise Mobility Solutions and Home and Networks Mobility Solutions) is the publicly stated long-term goal of Motorola," a company spokesman said. "We remain committed to the separation goal and continue to believe that it is the right strategy to position Motorola for long-term success."

Kelleher thinks that's a bad idea -- at least for right now.

"I just think they keep trying on different alignments and I don't see the benefit for shareholders," Kelleher said. "Until the company is substantially stronger, I think the company should do nothing."