Sources close to the account blamed strategic and creative differences for the split.
Mother won the £10 million account in October 2004. The agency is rumoured to have been developing a seven-figure advertising campaign for the device, a project that was linked to the US director Spike Jonze. Sources say Gizmondo baulked at the cost and produced its most recent ad - a TV spot that draws parallels between the device and the bumblebee - in-house.
The split is not believed to affect Carat and Naked, which continue to work on Gizmondo's media and planning business.
Gizmondo, a subsidiary of the US-based company Tiger Telematics, recently signed a £2.7 million pan-European deal with MTV, which will see it sponsor MTV at the Movies and the MTV Europe Music Awards.
No-one at Mother was available to comment.