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For a while now, rumor's had it Motorola might do something drastic about the albatross that its struggling cell phone division has become. Yesterday, the company made it official.

Motorola announced it is considering performing a sweeping realignment and restructuring of its Mobile Devices unit, spinning it off as a separate company, or selling the division to a third party.

“We are exploring ways in which our Mobile Devices Business can accelerate its recovery and retain and attract talent while enabling our shareholders to realize the value of this great franchise,” Motorola president and CEO Greg Brown said in a statement yesterday.

Brown took over at Motorola when former CEO Ed Zander stepped down on January 1st.

The days of Mobile Devices being very good to Motorola are a distant memory; if not to the company, then to shareholders.

It lost a whopping $388 million during its most recent fiscal quarter alone compared to $341 million in earnings only a year earlier, for example. As a company, Motorola lost $49 million last year, way down from its $3.6 billion in profits in 2006.

And while number-one cell phone vendor Nokia's been expanding its market lead, Motorola lost its number-two spot to Samsung last year, dropping to a distant third position with competitors like Sony Ericsson hot on its heels.

The waning demand for Motorola's once hot (110 million-strong) RAZR phones and lack of enthusiasm for that handset’s follow ups have contributed to the company’s sagging fortunes, as reflected by the steep decline of the value of Motorola stock over the last year or so.

Hard to believe it was less than two years ago that Motorola seemed poised to (or at least to have a chance at) toppling Nokia from its perch. At that time the RAZR was still relatively cutting edge and very much in demand worldwide and Motorola appeared to have a slew of exciting new phones ready to take its place.

The public didn't bite, however.