New CEO faces need to set Motorola priorities

Some suggest company would do well to focus on enterprise mobility

Edward Zander's departure as CEO from Motorola, announced Friday, should spark intense examination by incoming CEO Greg Brown into which markets the cell phone and communications equipment maker should focus on.

On the mobile phone part of the company, which provides nearly two-thirds of Motorola's revenues (which totaled US$43 billion in 2006), Brown needs to find a way to produce a steady supply of cell phones that are attractive to consumers and professionals, several analysts said in interviews today.

Zander grew far too dependent on the early success of the slim Razr phone, which quickly became a "one hit wonder," said Phillip Redman, an analyst at Gartner.

On the enterprise side, Brown needs to better integrate products and services provided by its Symbol Technologies and Good Technology divisions, which were acquired under Zander's tenure, added Chris Silva, an analyst at Forrester Research.

Some experts questioned whether Motorola might even be trying to sell products and services in too many technology areas to succeed. "Investors punish those who do too many things at once," noted Rich Smith, an analyst at The Motley Fool. He suggested Motorola might need to "cut bait on projects or spin off divisions."

After joining Motorola in January 2004, Zander, 60, was flying high as CEO into mid-2006 with the success of the Razr phone.

But the last year has been challenging. The company issued a lower earnings forecast in January, and at the end of October, it said profits would be off by 94% for the third quarter over the same period in 2006. Investor Carl Icahn appeared on the scene in the spring to critique Zander. Icahn also wanted a seat on Motorola's board, but lost in a proxy fight in May. In recent weeks, Icahn has urged Motorola to break itself up.

Redman said Zander didn't do himself any favors. In April, The Wall Street Journal made public a comment Zander often said: "I love my job; I hate my customers." The comment was reportedly first directed at the carriers that buy Motorola phones and were demanding lower prices, according to the article. But Redman said today that the comment has resonated since April.

"He disparaged his customer base and customers don't like to hear that," Redman said. "Zander had enough chances, and the company was not growing this last year. He was more of a salesman than a leader and not really a good salesman at that."

But Redman and other analysts said that Brown, 47, chief operating officer, might not do much better when he takes over Jan. 1 unless he can bring about significant changes.

"Brown doesn't have that much more experience than Zander did, and he's not an obviously better candidate," Smith said, noting that Brown needs to find a way to slow down Motorola's diversification. The company has its "fingers in too many pots," Smith said.

Redman said with cell phones, Motorola needs to find a way to innovate and to design better and more quickly. Nokia Corp., the top cell phone maker, brings in industrial designers to help create the look and feel of its phones, he said, and Motorola should try the same. (Samsung Electronics Co. took the No. 2 position behind Nokia at end of the third quarter, pushing Motorola into third place.)

"They need some of both of a Coco Chanel and a technology guru, and to be willing to go to outside designers," Redman said. It can take one to three years to conceive a phone and bring it to market, and Motorola needs to speed up the number of phones it has in the pipeline as well, he said. There are more than 7,000 software designers at Motorola, but the impression is that there are far fewer, he said.

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Matt Hamblen

Computerworld
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?