By Michal Lev-Ram

A lot happened in wireless this past year, from the debut of the iPhone to Verizon Wireless’ move to open its network. But 2008 promises to be just as eventful, starting with the Federal Communication Commission’s spectrum auction in January. Here’s a look at the 10 most significant events and trends in the coming year.

1. Wireless networks will remain the domain of wireless operators: There’s been talk that the upcoming 700-MHz spectrum auction could present an opportunity for a new carrier to emerge, given that companies like Google (GOOG) and even oil giant Chevron (CVX) have registered to bid. But most analysts agree it’s unlikely anyone but the current big mobile operators will win the showdown. “AT&T (T) and Verizon Wireless (VZ) will be the most aggressive bidders,” says Forrester Research analyst Charles Golvin. But regardless of who wins, the wireless world will change given an FCC requirement that the 700-MHz spectrum be open to any device.

2. The first Android phones hit the market: Taiwanese phonemaker HTC has said it expects to launch the first cell phone based on Google’s Android mobile platform by midyear, and other phonemakers are expected to follow. (Android is a wireless operating standard that aims to make the mobile data experience more Internet-like.)

3. Cameraphones will get even fancier: Have you checked out Nokia’s (NOK) N95 – a picture-taking machine that comes with a five-megapixel camera and still fits in your pocket? That’s the future of multimedia phones. “For the first time, in 2007 cameraphones became the majority,” says Mark Donovan, an analyst with research firm M:Metrics. “In 2008 we’ll see the technology continue to improve.” In the United States, 61 percent of phones already have built-in cameras, and there’s a growing range of uses for them. In addition to uploading and sharing photos directly over cellular networks, people will be able to take pictures of ads to get coupons sent to them via SMS or get product information by taking a shot of a barcode.

4. Mobile ads will come to a cell phone screen near you: Sure, estimates of mobile advertising revenues have often turned out to be overblown, but that doesn’t mean the industry isn’t making headway. In 2007, many of the big players – Google, Yahoo (YHOO) and Microsoft (MSFT) – made mobile ad-related acquisitions. Expect to see the fruits of that shopping spree start to appear later in 2008. It will be a while before subscription-based models lose ground to ad-based ones, much like what happened on the Internet, but the wireless industry is slowly opening up to ads.

5. WiMax will become available: This is the year Sprint (S) will launch its Xohm mobile broadband service in select markets like Chicago, Baltimore and Washington, D.C. By end of 2008, Sprint expects to reach 100 million customers with its new ultra-fast mobile data service. While Nokia’s Internet tablet will be one of the first compatible devices available on Sprint’s new network, analysts don’t expect to see affordable WiMax-enabled phones anytime soon.

6. Openness will continue to dominate the wireless lexicon: You can thank Google for this one – ever since the Internet search giant began lobbying the FCC to open up the 700-MHz spectrum, “open” has become the latest buzzword in the cellular world. At first the big mobile operators tried to fight it, but once they realized they couldn’t beat Google they joined in. Look for holdout AT&T to become more open to the possibilities of open in 2008.

7. Nokia will become a major mobile software player: With its new chief technology officer based in the Silicon Valley, a reorganization that will make software and services one of the company’s main business groups and the upcoming launch of its Ovi web portal, expect the Finnish phonemaker to become much more than a hardware player in 2008. The company’s buying streak (it’s already snapped up startups like photo-sharing service Twango and digital mapmaker Navteq) is likely to continue.

8. Getting lost will get harder: What, you don’t have a GPS-enabled phone? Don’t worry, you will soon. That’s because the FCC’s “Enhanced 911″ rules is slowly forcing U.S. carriers to make their handsets GPS-capable. That in turn will drive more and more location-based services (think social networking and advertising) in 2008.

9. More touchscreens: The iPhone wasn’t the only touchy-feely phone to come out in 2007. There was also the HTC Touch and Verizon’s Voyager and Venus devices, which launched in time for the holiday season. But expect to see even more all-touch devices in 2008. According to ABI Research, over 100 million handsets with touchscreens will be shipped in the new year By 2012, that number is expected to reach 500 million.

10. Silicon Valley will become a wireless industry hot spot: The Valley is home to iPhone-maker Apple (AAPL), Android creator Google, Nokia’s new CTO and countless mobile startups. With the increasing focus on software and services – not just phone manufacturing -  Silicon Valley will become even more prominent on the wireless map.

By Michal Lev-Ram

Remember when phone companies just made phones? That strategy no longer works in today’s Internet-accessing, mobile-gaming and MP3-playing world – and it definitely won’t work in 2008. That’s why Nokia (NOK), the world’s largest phone manufacturer, is in the midst of a reorganization it says will help the company grow beyond phones and cellular equipment. The new corporate structure, which takes effect January 1, 2008, will divide the Finland-based company into three main units: Devices, services and software and markets. It’s the services and software part that stands out for a phone manufacturer – typically more concerned with churning out devices than with providing services.

But the reorg is just part of newish CEO Olli-Pekka Kallasvuo’s overall strategy of morphing Nokia into a mobile Internet company, not just a phonemaker.

“The convergence of the mobile communications and Internet industries is opening up new growth opportunities for us, both in the devices business as well as in consumer Internet services and enterprise solutions,” Kallasvuo said last June when he first announced the reorg. Since he took on the chief executive role in 2006, Kallasvuo’s already led Nokia through several software and services-related acquisitions – including digital mapmaking giant Navteq, photo-sharing service Twango and Avvenu, a Palo Alto, Calif.-based company that lets users access content on their PC via cell phone. He’s also announced the launch of Ovi (which means “door” in Finnish), a one-stop Web portal which will combine Nokia’s various mapping, music, gaming and other mobile services. Some Ovi offerings are already available to wireless users in the United Kingdom, but recent software delays (welcome to the biz, Nokia) have forced the company to postpone the launch of one of its most anticipated services – a mobile gaming platform called N-Gage.

The shifting focus on software rather than pure hardware is a big step for the wireless industry. What’s more, it’s being pushed forward by many different types of companies (not just mobile operators) and could therefore end up driving competition and, ultimately, improving the consumer experience. But according to iSuppli analyst Tina Teng, the move is nothing new for Nokia.

“Nokia’s been doing this for a long time, and this is just the next step in moving beyond the devices themselves,” says Teng, who adds that the company’s music service in particular could be a game changer and a threat to carrier-operated stores, much like Apple’s (AAPL) iTunes. “Just look at what Apple did with their Wi-Fi enabled iPhones – you don’t have to go through the cellular networks to download music anymore.”

Speaking of Apple – the extension to software and services also means that Nokia’s circle of competitors is also growing. Once restricted to traditional phonemakers like Motorola (MOT) and Samsung, the company could soon find itself neck-and-neck with cellular operators who would rather sell their own branded services, Internet-centric companies like Google (GOOG) and Yahoo (YHOO) and mobile newcomers like, you guessed it, Apple. That’s probably why, as part of Nokia’s upcoming reorg, its new chief technology officer Bob Iannucci will be based in Palo Alto, the heart of Silicon Valley, and not in the company’s Finnish motherland.

Of course, while the demand for rich mobile experiences like location-based navigation applications, mobile Web access and on-the-go gaming is growing in many developed countries, lots of people – about 50 percent of the world’s population – are still just waiting to get their hands on their first cell phone. That means that Nokia still needs to focus on spreading and improving its physical goods. Sure, with an estimated 39 percent global market share the company’s the largest phone manufacturer in the world, but, as Motorola recently demonstrated the tables can turn much faster than you think – one minute you’re riding high on the Razr’s success, the next you’re posting a $138 million quarterly loss on your handset business.

As for Nokia, it will be a while before the results of the company’s reorg can be measured. For now, the Finnish phonemaker just needs to kick the door open – by launching Ovi, that is.

By Yi-Wyn Yen

A new study reveals that the majority of consumers would rather be bombarded with online ads than pay for content on the Web. Deloitte’s annual media consumption report also indicates that 66% of Internet users would click on more online ads if they were better targeted to them. The study used 2,081 U.S. Internet users ranging in age from 13-75.

“This is across the board, what mainstream America thinks about online advertising,” says Ed Moran, director of product innovation with Deloitte who conducted the survey.

In the online world where anything legal is rarely paid for, younger users are most receptive to ads. Nearly three quarters of Generation X (ages 25-41) and millennials (ages 13-24) polled said they would be willing to be exposed to online ads in exchange for free content. Among the millennials, who visit fewest sites per week of any generation, 72% said they’d click on more ads if they were more relevant, while 67% of Xers said they would.

Major Internet companies have been banking on this strong consumer attitude towards online ads. Everyone’s racing to grab a share of the projected $27.5 billion that will be spent on online ads in 2008, according to research firm eMarketer. Google (GOOG), Microsoft (MSFT), and Yahoo (YHOO), spent more than $11 billion in acquisitions to reshape Internet advertising this year in hopes of delivering more relevant ads.

Online ads range in effectiveness. Ads delivered from search engines remain the most influential. The study reports 78% respondents found the most useful ads by performing keyword searches. (This may also explain why Google’s paid search business is expected to increase nearly 42% to $16.6 billion next year.)

Ads inserted into videos are among the most hyped by big media companies, but they appear to be the least effective among users. Less than a third want to watch commercials that appear before the start of a clip and only 17% said they will watch an ad that plays during a video. Hulu, a joint venture between NBC Universal and News Corp. (NWS), is currently testing the ad model in shows like “Heroes” and “30 Rock”, which it streams on the web.

“We’re at the cusp where we’re seeing people consume media a la carte and on any device. It’s not just TV anymore. Companies are experimenting by moving their content to the web and tacking on the commercials. It’s a logical way of extending the model that works on one medium, but willthis work going forward?” Moran says. “Right now there’s no deliberate advertising model. This is a hard model to predict.”

By Josh Quittner

Hayden Black was thrilled—initially—to see traffic start to spike as his online-only sitcom, “Goodnight, Burbank,” found a fan base on Facebook. Then, he tells me, not so much: “Many people erroneously think that the success of your show is determined by how many people go to your website. But watching video on the Internet is an animal in and of itself.”

The problem was that Facebook fans like to stay put on Facebook. Instead of going to blip.tv — the video site that hosts “Goodnight Burbank” and sells ads on its behalf — Facebookers used video-viewing applets to stream the show back to the social network. That may have been good for the series’s popularity, but generated exactly zero income for Black.

So with his latest venture, “Abigail’s X-Rated Teenage Diary” Black built his own social network around his video content. It launched earlier this week. Or rather, he used Ning, the white-label service that lets anyone create a social network. “How do we bring people in? How do we fight the challenge of getting them to leave Facebook for a moment?” Black asks. “I think the best way is to use what Ning is doing — a social network in a box.”

A number of online TV companies are doing the same thing.  Social networks on Ning support, or will soon support, video programs like NextNewNetworks’ “Epic-Fu” and Channel Frederator; the Animation Social Network; Jason Calcanis’s “Maholo Daily” and the popular video podcast “TikiBar.”

This makes a lot of sense to me. We live in a media world; we are awash in the stuff. We define ourselves by the media we choose to consume — that’s partly why people prominently display the books they’ve read. We carry around like flags the magazines we love, and buy “The Sopranos” on DVD because we want to physically possess it. It’s actually kind of shocking that HBO never thought to start a Soprano’s social network.

Of course, none of this is lost on the hungry folks navigating the edges of new media.

Some bigger sites, such as Funny Or Die, are even building out their own in-house social networks. Mark Kvamme, the VC from Sequoia Ventures, which funded the Will Ferrell-backed comedy video site, says that funnyordie.com uses the same platform technology as sister sites mybluecollar.com and skateboard king Tony Hawk’s shredordie.com. Kvamme calls this the “Or Die Network” and says that it will be launching three to five new celebrity-affiliated video sites over the next six months. “We’re building a platform to partner with creative folks to give them best-of-breed web technologies to help them communicate,” he tells me. “We’re baking in our own social networking features.”

Kvamme says that building a social network around a video site is a no-brainer from a viewer standpoint.  “These audiences want to connect and communicate. They want information. We have thousands of people on the newsfeed looking for new videos coming out.”

While Funnyordie had 3.5 million unique visitors in November, Kvamme says it’s yet to turn a profit. “We haven’t figured out how to monetize Internet video yet.”  But social networks, which can demonstrate to advertisers user engagement, among other things, could solve the problem. Kvamme predicts that within five years, “Internet advertising will surpass broadcast television.”

Jeff Macpherson and Tosca Musk live in Vancouver and produce “TikiBar,” an online series about cocktails and the bachelor life. They started their video podcast nearly three years ago as a hobby, and it quickly ramped up into a real business. Currently, each episode is downloaded around 500,000 times a month.

A social network, says Musk, “allows us to really communicate with the audience. Fan scripts and art and music would be e-mailed to us all the time, and very little of it was used. It just sat there doing nothing.” With the launch of the TikiBar network on Ning (still in beta), however, fans can create their own pages and share all that stuff. “Forums are a kind of limited way of expressing oneself,” says Macpherson. “They’re limited to straight, linear text. The social network is a less linear experience — it doesn’t feel like you’re looking at a database of messages. You have your own page, music, photos, documents, and even sets of icons the user creates. It really feels like it comes to life.”

By Michael V. Copeland

You have to hand it to NetSuite. While the markets have been whipsawing all around, the on-demand finance software company backed by Oracle (ORCL) CEO Larry Ellison got its IPO done via a Dutch auction at a price, $26, almost double the stock’s original target.

If NetSuite’s first day’s trading on Thursday is any indication, the company also did incredibly well in the pricing of shares. So far, the share price is up about 25 percent from its $26 open. Which means the auction approach worked well for NetSuite. A bigger pop in price would have meant the underwriters left money on the table. In NetSuite’s case they swept up every last nickel.

That means proceeds of $161 million for the San Mateo, Calif.-based company, and as much as $185 million, should another 930,000 shares get bought and parceled out by the offering’s underwriters, Credit Suisse First Boston (CS) and W.R. Hambrecht.

So, who are the big winners here? Larry Ellison for starters. He owns 61 percent of the company, now with a market cap of around $1.6 billion. NetSuite’s (N) original VCs, New York-based StarVest Capital, have also done well for themselves.

But the IPO investors, those institutions and individuals who participated in the auction may be wondering if perhaps they paid too much. The last thing they, or the underwriters want, is a stock that dips into negative territory on the first few days of trading – that puts a bad taste in the potential investor’s mouth. NetSuite did dip into the red briefly at the open of the New York Stock Exchange on Thursday, but moved into the positive quickly after. So if you are a flipper, you’re going to need to hold on to your shares a bit longer, and hope NetSuite’s business continues to build. NetSuite had a net loss for the first nine months of 2006 of $26.9 million.

Don’t lose hope. Despite not having turned a profit yet, NetSuite is just one of a handful of leading software-as-a-service companies that are turning the traditional enterprise software model on its ear. Salesforce.com (CRM) was the pioneer, but in every category you’re seeing leaders arise that stand to do very well by a business model that offers cost savings, flexibility and scalability that is hard to match by a traditional software approach.

NetSuite is the latest on-demand company to tap the public markets in a tough year for IPOs. This year has seen a handful of on-demand companies such as K12, AthenaHealth, SuccessFactors and others successfully go public. Given the efficient business model, the technology’s disconnect from the housing market meltdown, and its global footprint, you are going to see more.

By Yi-Wyn Yen

The Federal Trade Commission cleared Google’s purchase of DoubleClick Thursday morning, bringing the search giant one step closer to closing the $3.1 billion deal.

After reviewing complaints from Microsoft (MSFT) and AT&T (T) that Google’s acquisition of  DoubleClick, which serves graphical ads, would create a monopolistic ad company, commissioners voted 4-1 in favor of Google. The antitrust regulators argued that despite Google’s (GOOG) powerful hold in paid search and DoubleClick’s dominance serving display ads, there was plenty of room for everyone to compete in the $40 billion online advertising market.

“The FTC’s strong support sends a clear message: this acquisition poses no risk to competition and will benefit consumers,” said Google CEO Eric Schmidt in a statement. “We hope that the European Commission will soon reach the same conclusion.”

Google needed the FTC’s stamp of approval to move forward with its deal, but the real test for the Mountain View-based company is in Brussels. Google remains stuck in a holding pattern while the European Commission reviews antitrust concerns. European regulators have until April 2 to make a decision.

“Google is hardly out of the woods,” said Blair Levin, a tech regulatory analyst with Stifel Nicolaus. “They may face more difficulty in Europe.”

Earlier this week, some European lawmakers said they would press regulators to address privacy concerns in the Google deal. A European Parliament member said a civil liberties committee was planning to host a public hearing to draw attention to how personal information is stored by Google and DoubleClick. “The European Parliament is trying to run political interference and get the Commission to take into account data privacy concerns,” said Juan Delgado, a former antitrust official and research fellow at Bruegel, an independent economic think thank in Brussels. “They can put all the pressure they want, but the European Commission has managed to maintain its independence.”

Google says it will only address regulators’ concerns. “Both the FTC and the European Commission have made it crystal clear that privacy is outside the scope of argument,” said Ben Novick, a Google spokesman based in London. “This is about competition and competition only.”

Google’s European policy team will use similar arguments that helped the company win approval in Washington, according to Novick. He contended that Google and DoubleClick won’t create a monopoly because one company sells ads while the other serves ads. He also said recent ad network deals by Yahoo (YHOO), Microsoft, WPP and AOL (TWX) indicate the online advertising market remains competitive.  “All those acquisitions have gone through straightaway,” Novick said.

By Michal Lev-Ram

What do Microsoft co-founder Paul Allen, search company Google (GOOG) and energy giant Chevron (CVX) have in common? All three are potential bidders on the Federal Communications Commission’s (FCC) upcoming wireless airwaves auction.

The bidding for the coveted 700 MHz spectrum (originally used for analog TVs) doesn’t start until January 24, but late yesterday the FCC released the names of the 266 companies and individuals who have applied to bid. Wireless veterans like Verizon (VZ) and AT&T (T) were on the list,  but so were lots of unconventional hopefuls – including a media company, cable operators and a chipmaker. It’s long been known that Google had its sights set on the prize (at least that’s what the company’s said publicly), but many of the other non-telco applicants on the list came as a surprise.

The diversity of the companies on the list is an indication of the changing wireless landscape in the United States. Just a few years ago, a Silicon Valley company wouldn’t have gotten involved in a spectrum auction – they would have left that challenge to the telcos. But as the future becomes increasingly mobile, everyone wants a piece of the wireless pie.

“With new and upcoming technologies, consumers are going to be able to go mobile with full Internet capacity, and that’s driving non-wireless players to say ‘Hey, we need to be in mobile too’,” says Charles Golvin, a wireless analyst with Forrester Research.

That’s also led to a push to “open up” the U.S. industry – traditionally controlled by mobile operators’ tight grip on phonemakers, developers and, of course, consumers. That’s why Google, unable to spread its mobile applications as freely as it would like, lobbied the FCC to make the upcoming 700 MHz spectrum open to all devices, regardless of who wins the auction.

But, despite the changes afoot, it’s unlikely Google or any of the other unconventional bidders will actually win licenses in the auction.

“I personally believe that we’re not going to see a lot of new entrants in the actual building out of networks,” says Golvin, who expects AT&T and Verizon to be the most aggressive bidders. “Operating networks is only for the few and hearty souls.”

By Michal Lev-Ram

Half the world doesn’t even own a mobile phone but wireless carriers are already fighting over the next-generation cellular network.

Consumers may care less about whether they’ll be using WiMAX, LTE or UMB to download video to their phones or browse the Web faster than ever before. But one by one, mobile operators are aligning themselves with one of these competing next-generation, or 4G, technologies, placing billion-dollar bets on the horse they hope will win the race.

All three of the dueling technologies are Internet Protocol-based and tailored for mobile television, video chat and other data services that eat up a lot of bandwidth.

The first of these technologies to hit prime time will be WiMax, which Sprint (S) is expected to soon launch in three trial markets — Chicago, Washington D.C. and Baltimore. By the end of 2008 the company says it will reach 100 million people with its new network. Motorola (MOT), one of the suppliers of infrastructure equipment — and eventually WiMax-enabled phones — for Sprint’s upcoming service, says it has signed 15 contracts for commercial WiMax networks.

“We’re driving it at about twice the pace of traditional cellular technologies,” Fred Wright, senior VP of Motorola’s home and networks mobility unit, told reporters earlier this week.

WiMax proponents claim that the technology is superior to other 4G standards because it’s faster and more affordable. But Philip Solis, an analyst with New York-based ABI Research, says all 4G networks are more or less created equal.

“The three major 4G technologies are pretty much on par with each other,” says Solis, though he adds that WiMax has already been standardized and deployed.

That didn’t stop Verizon Wireless (VZ) from picking LTE — Long Term Evolution. Solis says LTE isn’t expected to become widely available until 2010, but Verizon says it chose the technology partly because the roaming potential it will have with Vodafone. The British company owns a 40 percent stake in Verizon and has already chosen LTE as its next generation technology.

Although the two largest CDMA carriers in the United States have picked opposing 4G technologies, Motorola’s Wright says that won’t slow adoption of next-gen networks.

“There’s probably more industry confusion that was created than anything else,” he says.

The U.S.’s No. 1 wireless carrier, AT&T (T), has not decided which 4G network it will deploy.

In addition to WiMAX and LTE, AT&T has yet another technology to choose from — Qualcomm’s (QCOM) UMB, or Ultra Mobile Broadband. So far, though, no mobile operator has committed to UBM.

But the bigger question — beyond whether the 4G network of choice will be WiMAX, LTE or UMB –– is whether consumers are as hungry for wireless broadband as carriers think they are.

“We’re all hoping they’ll want to watch TV on their cell phones,” says Qualcomm executive Joe Lawrence.

By Yi-Wyn Yen

Since Google launched its Checkout online payment service 18 months ago, industry insiders have wondered if its aggressive marketing promotions were worth the money.

The company, which has been tight-lipped about the performance of its Checkout campaign, revealed new figures to Fortune on Monday that suggest it’s making inroads in luring customers and merchants.

Google says web shoppers who’ve signed up for Checkout — which stores credit card and other personal information so consumers can make quick and easy purchases — are 10 percent more likely to click on an ad that features a Checkout button and 40 percent more likely to make an online purchase once they reach a site. In other words, if an online retailer uses Checkout and spends ad dollars on Google (GOOG), it improves the chance that shoppers will make purchases on its site.

“These are outstanding results,” says Tom Oliveri, product marketing manager for Checkout. “Merchants are seeing the benefits of higher traffic and more sales. Google is bringing those stores better buying experiences.”

Nevertheless, Google has yet to pose a significant threat to eBay’s PayPal (EBAY), the clear leader in third-party online payment services. PayPal (EBAY), which lets people transfer money from their bank accounts to other individuals, raked in $470 million in the third quarter — a 35 percent increase from a year earlier — to make up 25 percent of eBay’s revenue. PayPal, which began accepting MasterCard (MA) payments on sites that don’t offer its service last month, has roughly 150 million users and hundreds of thousands of merchants. Oliveri says Checkout has more than 100,000 merchants and millions of users.

Checkout has cost Google some serious cash. Wall Street analysts estimate that Google has invested between $80 million to $100 million since the June 2006 launch to get both sellers and shoppers to use the service. As an incentive to shoppers, Google started giving discounts to its users last year and has continued the practice during the current holiday season. It is also offering free shipping on purchases over $50 and frequent-flier miles on most major airlines. For merchants, Google has waived processing fees between November 2006 and January 2008.

But once the financial promos end, will merchants continue to flock to Checkout? As long as they spend on AdWords, which allows advertisers to bid for prime real estate on Google’s site whenever a person performs keyword searches, it makes financial sense.

Lanny Morton, who sells sports equipment on SportsCloseouts.com, uses Amazon (AMZN), eBay, Overstock (OSTK) and Google to drive traffic to his site. He says that since he began using Checkout 18 months ago, traffic has doubled and browsers have converted into buyers at a rate of 3 percent, up from 1 percent previously.

“In the last seven days, I’ve spent $45.85 on Google AdWords to get 136 click-throughs for a specific pair of snowboard bindings,” says Morton. “I only need to sell two to make a profit, and I’ve sold six. That’s not bad at all. And for the others, they may come in for bindings, but end up buying a baseball bat.”

By Michal Lev-Ram

Mention Motorola and most people think cell phones. But if speculation that the company might say goodbye to its phone business proves true, Motorola will lose its core brand.

What would a Razr-less Motorola do? While its best known for phones, which account for about two-thirds of revenues, the embattled company has two other big business units: Enterprise mobility, which sells radios to the government, and home and networks mobility, which makes cellular infrastructure equipment and cable set-top boxes, among other products. And unlike its cell phone unit — which last quarter incurred an operating loss of $138 million — some of these other businesses are actually showing strong growth.

That’s why some analysts (and activist investor Carl Icahn) argue that hanging up on the cell phone business could benefit Motorola (MOT) shareholders. Case in point: While phones sales were down 36 percent last quarter compared to the previous year, sales of home and networks mobility products were up 6 percent and the enterprise mobility solutions business was up 47 percent.

“Motorola does have a leadership position in several markets,” notes Lawrence Harris, an analyst with Oppenheimer & Co.

Of course, not all of Motorola’s secondary businesses are booming. Ping Zhao, a senior analyst with CreditSights, says sales of cellular infrastructure equipment are in an industry-wide slump. Still, she puts Motorola’s total value without its handset business, at about $29 billion.

“Without the handsets you’ve got some businesses that are very interesting and very strong,” says Zhao. “Basically, the sum of its parts is greater than than its stock price would suggest.” Though Zhao says breaking up the company would be advantageous from a shareholder’s perspective, she adds that it’s not clear what it would mean for Motorola in the long run.

Motorola declined to comment on whether it would consider selling off its phone division.

Icahn recently claimed that doing so would produce almost $20 billion of additional shareholder value. The company’s third-largest shareholder has been pushing to split up the company since the Razr started its downward spiral. Former CEO Ed Zander opposed Icahn’s plan but new chief executive Greg Brown may be more amenable to making changes.

“While I do think the new CEO is going to take the opportunity to review the company’s portfolio, I would be surprised if we were to see significant action in the near term,” says Harris, the Oppenheimer & Co. analyst.

One of the reasons Motorola might be reluctant to sell its mobile devices unit, says Harris, is that it has synergies with other businesses within the company, such as cellular infrastructure equipment.

But last week acting Motorola finance chief Tom Meredith opened the door slightly by telling a group of investors that while Motorola could remain intact, “A change in circumstance sometimes requires a change in action. So I will leave it at that.”

Changing circumstances are the nature of the wireless market. Just two years ago, everyone wanted to own a super-thin Razr. But then competitors caught up with the clamshell phone while Apple (AAPL), Nokia (NOK) and other phonemakers started coming out with multimedia devices that left Motorola in the dust.

Of course, the company founded in 1928 as a manufacturer of in-car radios and other products has played a key role in the development of cell phones and has bounced back before. If the handset business stays with the company, it’s not impossible the phonemaker could regain its former glory.