Motorola Dumps Brash CEO

One trick pony may be an apt description for Ed Zander, who had been CEO of Motorola but now finds himself on the unemployment rolls .Brazen and controversial, Zander stormed into Motorola four years ago and rode the wave of the Razrs wildly successful product launch. Initially, it appeared that Zander was the white knight arriving in time to rescue the slumping network equipment supplier from lackluster financial performances. That image proved to be fleeting. In the past 18 months, the company has slumped badly. Rather than vie with Nokia for the top spot in the highly competitive cell phone market, Motorola has slipped into third place, trailing Samsung as well as Nokia.

Zanders blood has been in the water for a while, so the shakeup was expected. The regime change started to take shape in March 2007 when Motorola gave the titles of President and Chief Operating Officer to Greg Brown. He joined the company in 2003 after serving as chairman and CEO of Micromuse Inc., a network management software company, and had overseen various Motorola divisions. The movement to change leaders gained momentum in May when Carl Icahn, the billionaire financier who specializes in shaking up slumping companies, lost a bid to gain a seat on Motorolas board of directors.

In its recent move, Motorola added the title CEO to Browns business card. One of the challenges he faces is unifying the schizophrenic nature of its business. The cell-phone unit is Motorolas biggest revenue producer, but it has not been particularly profitable. In fact, Zander admitted that one tactical mistake the company made recently was lowering cell phone pricing in order to gain market share. Also, the fixation on cell phones hindered the efforts of the companys other divisions: home and networks mobility, its second largest; and enterprise mobility, which sells computing and communications equipment to small and medium businesses. Even though these divisions have not generated as much revenue as cell phones, they have been more profitable.

Motorolas new long term direction may be evident by a few of Browns previous decisions. He was instrumental in the companys $3.9 billion acquisition this year of Symbol Technologies, a maker of barcode scanners and handheld computers, and its $1 billion divestiture of the automotive electronics business in 2006. His emphasis seems to be more on corporate networking infrastructure and less on consumer devices. This could be welcome news to small and medium businesses. Traditionally, Motorola has been a key supplier of enterprise and carrier network infrastructure. That focus had been lost as its cell phone business took off. Perhaps, Brown is the person to lead the company back to its roots. He takes the reigns as the new year begins, so one will see if he can usher in a new, more successful era for the troubled equipment supplier or will eventually join Zander in the unemployment line.

Does your company have any dealings with Motorola? If so, how would you characterize them? What products do you think the company should focus on?