Your handset business is tanking and bringing the rest of the company down with it. What do you do to make things better? Well, if you're Motorola, you develop a service for...downloading movies onto cell phones? Huh?

According to MocoNews, which cites an NMA.co.uk report, Moto is teaming with Paramount on an online store where users can download movies to a PC and then sideload them onto a compatible Motorola phone.

Motorola really seems to like this movie-on-mobile concept - last year it pre-loaded "The Bourne Identity" on its Z8 handset and the Z10 is due to launch in the UK in the next week pre-loaded with "The Ultimate Bourne Collection."

The rumored service is expected to launch as early as next month. Moto is also reportedly in talks with other studios about signing on.

What we really want to know is this: Has anyone ever watched a full-length action flick on a cell phone and why would they want to?

Another week, another plan by Motorola to reorg its mobile business. This time the idea is to come up with a better software strategy and get its handsets to market faster before spinning the unit off into its own company, the Chicago Tribune reports.

The new structure will organize the teams by product categories rather than by hardware vs software, as things are now.

In a statement, a Motorola spokeswoman said the reorg should "attract and retain top talent, including a new CEO for our mobile devices business."

Engadget already has a number of reports from CTIA, the wireless industry's largest trade show that's starting today in Las Vegas. Dozens of new handsets are already being announced, such as the new Motorola Z9 on AT&T (pictured), which will cost $149 with a two-year contract, after the usual array of complicated rebates and discounts.

One of the trends to look out for this week is the emergence of GPS as a standard feature in dozens of handsets. In the Z9's case, AT&T will be offering their new AT&T Navigator service, which is a simple rebranding of TeleNav's excellent GPS Navigator voice-enabled offering that costs $9.99 per month to activate.

For a while now, Sprint has had the lead in GPS-enabled handsets, but look for that to change as the other three carriers all introduce more devices with built-in GPS radios. Some analysts are already predicting the eventual demise of standalone portable navigation devices. Currently, those units are still slightly better technically than the phone offerings, and require no monthly fees (although they have an up-front cost ranging from about $200 on up.) But it's looking more and more like that will change over time, as consumers look to consolidate the number of devices they carry.

So, all the news out of Motorola this week wasn't about splitting up the company and what, if anything, Carl Icahn had to do with the decision.

Almost lost under the avalanche of "what does the future hold" stories was the announcement of a cute little touch-screen mobile TV. At CTIA in Vegas next week, Moto will be showing off the Mobile TV DH02, along with five other new products, Computerworld reports.

One way the DH02 will access digital broadcast content over wireless spectrum, but that type of service isn't yet allowed in the US. Heck, the spectrum auction only just ended. According to the Computerworld report, the touch-screen will let users click, drag and scroll through icons to find something to watch. It will also support HSDPA and GPRS networks, so carriers to offer interactive services.

We can only assume that the slew of new products is Moto's way of showing that while it may look like the company is on life support, it's not dead yet.

Engadget editor-in-chief Ryan Block posted an eye-opening tell-all from one of Motorola's top insiders concerning today's stunning spinoff of the company's fabled handset business. The report contains the full text of a letter written by the late Geoffrey Frost's personal adviser at Motorola; until Frost's death in 2005, Numair Faraz worked under the Motorola's former CMO—the man widely regarded as the father of the RAZR, the report said.

According to Block, Faraz personally asked Engadget to publish his letter to Motorola, its board of directors, and MOT investors everywhere regarding the "company's egregious missteps and mismanagement." The letter goes into everything from former CEO Ed Zander's stunning missteps, to the current CEO Greg Brown, to whom Faraz wrote:

"Your appointment to the position of chief executive gave me cause for hope, and I reached out to you; I knew you were one of the main drivers behind the enterprise acquisitions, and that you had zero expertise in consumer devices. Surely you could use some help in turning Motorola's flagging cellphone business around?

"But apparently different from the rest of the incompetent senior executives at Motorola—except instead of merely being inept, you're actually actively killing the company. Your lack of understanding of the consumer side of Motorola doesn't give you a valid reason for selling the handset business; moreover, publicly disclosing your explorations of such a move, in an attempt to keep Carl Icahn off your back, shows how much you value the safety of your incompetence." You can find the full letter, along with Engadget's commentary, here.

One month after Motorola CEO Greg Brown took direct control of the company's troubled handset business, Motorola announced the "immediate" departure of its former head, CNET News reports. This move came one day after the company confirmed that its marketing chief was also no longer with the firm:

"Motorola, Inc. today announced that Stu Reed, formerly the president of Motorola's Mobile Devices business, has decided to leave the company, effective immediately," the company said in a statement.

As the article indicated, the last six months or so "haven't exactly been the best period in the history of Motorola's mobile-phone business," noting that the company lost a lot of market share, as the industry speculated the company could spin off its handset business entirely.

Samsung, which recently overtook Motorola for second place in global handset sales, said it would not be acquiring its American rival's handset business, MocoNews reports.

Add Samsung to the pile with LG and Sony Ericsson as a list of companies that denied interest in the struggling handset manufacturer.

According to Reuters, which cited South Korea's Yonhap News, Samsung telecommunications unit chief Choi Gee-sung said there were too many "overlapping areas and little to gain." Plus, as MocoNews points out, Samsung is gaining market share without it

Motorola, for its part, is still "fully committed" to their handset business. We certainly hope so; as the largest handset vendor in the U.S., Motorola produces a lot of top-tier devices with the U.S. market in mind. If they're bought out, there's a good chance that whoever ends up with the handset division won't focus as hard on producing handsets that support U.S. networks.

Samsung Won't Buy Motorola Handset Unit Either [MocoNews]

On Friday, just a day after new Motorola CEO Greg Brown announced that the company is considering a spin-off of its handset business, Motorola employees received an internal memo stating that Brown is taking direct control of the unit, Reuters reports.

Brown's move, which wrests control from Stu Reed, who took over the ailing mobile unit this past summer, is meant to help "speed up the unit's recovery," the report says.

A Motorola spokeswoman told Reuters that Reed will remain at the company, working closely with Brown.

After mounting speculation and endless rumors, Motorola has finally admitted that it's considering spinning out its handset business. The announcement by Motorola CEO Greg Brown came after the close of US trading yesterday. In early trading today, shares of the embattled company rose as much as 17% of the Frankfurt exchange, Bloomberg reports.

The news comes after Motorola experienced a 38% drop in phone shipments in the most recent quarter. Much of the lost market share went to Apple and Samsung, which pushed Samsung beyond Moto to become the second-largest handset maker behind Nokia.

Reuters reports that Motorola said on Wednesday it will post an operating loss in the current quarter as recovery in its cell phone business is taking longer than expected, dashing Wall Street expectations for a profit and sending its shares down as much as 14 percent.

"The figures had us scratching our heads checking the date to see if we were looking at an earnings release from 2002," JPMorgan analyst Ehud Gelblum said in a note to clients.

Motorola has struggled recently, as it has proven unable to follow up its surprise 2004 hit with the RAZR. Plus, over the past few years, the company eroded its profits as it heavily discounted RAZRs from their original $500 list price in an attempt to gain market share.

Poor Cell-Phone Sales Will Lead to Motorola Loss [Reuters via Smart Device Central]