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Icahn calls for Motorola breakup

He suggests three companies--one for mobile devices, one for mobile networks, and a one for home connectivity.

Activist investor Carl Icahn welcomed the replacement of Ed Zander as CEO of Motorola on Friday but said there was much more to do and called for a break-up of the world's third-largest cell phone maker.

"In my opinion, Motorola should be split into separate companies: a mobile devices company; an enterprise mobility company; a connected home company; and a company focused on mobile networks infrastructure," said the billionaire investor, who holds about 3 percent of the company.

Icahn, who failed to win a seat on Motorola's board in May after a bitter battle, said in a statement the changes revealed on Friday were not enough to address "major problems" at the company, which also makes set-top boxes and network equipment.

"The best opportunity for the mobile devices' business to attract top-flight management and to prosper and grow is to establish it as a standalone business," he said.

Motorola announced on Friday that Zander, who was chief executive for four years, would be replaced by Greg Brown, currently chief operating officer.

"Although I like Ed Zander personally, I never thought that he was the right man for the job," Icahn said.

The investor and his affiliated companies held 60.5 million shares in Motorola and was its sixth-largest shareholder on September 30, according to Thomson Financial analytics.

Motorola declined to comment on Icahn's statement.

Motorola has a market capitalization of $36.5 billion based on Friday's closing share price of $15.97 and a share count of 2.284 billion shares, according to Reuters data.