After months of pressure and with another nasty proxy fight brewing, Motorola decided to do what Icahn has been pressing for: separate the struggling handset business from the company's other operations. As outlined by CEO Greg Brown, Motorola will become two separate publicly traded companies, one for handsets and one for its home and networks business (set-top boxes and modems) and its enterprise mobility solutions (business computing and communications equipment). "The creation of the two independent publicly traded companies provides improved management focus and a capital structure that's more tailored to the individual business needs," said Brown. "And it will provide some improved alignment and agility and will help us going forward."

Analysts were encouraged, if only because nothing else seemed to work. "We view this as a clear positive, as it will make it easier for Motorola's mobile devices business to attract talent and execute its turnaround," Morgan Keegan & Co. analyst Tavis McCourt told investors in a research note. The market was more circumspect, with the stock price rising only slightly.

No word yet on Icahn's plans, but the Financial Times reports that Motorola's board has unofficially accepted three of the nominees that the billionaire investor wants seated at the table, but is balking at the fourth -- Keith Meister, the 35-year-old CEO of Icahn Enterprises. The acceptable nominees -- - Frank Biondi, Viacom's former chief; William Hambrecht, founder of securities firm WR Hambrecht; and Lionel Kimerling, an engineering professor at MIT -- are considered sufficiently independent, but, says the FT, the board thinks Meister would be a pipeline to his master. The official reason for rejecting Meister is a lack of qualifications, though Icahn notes that the nominating committee "never even deigned to give Meister an interview."