Motorola CEO takes charge of troubled handset unit
Mon Feb 4, 2008 12:14am EST
NEW YORK, Feb 3 (Reuters) - Motorola Inc (MOT.N: Quote, Profile, Research) said its Chief Executive Greg Brown was taking direct control of the company's loss-making handset business, replacing Stu Reed, in a move aimed at helping speed up the unit's recovery.
Motorola announced the decision to employees in an internal memo sent on Friday, a day after it announced that it was considering options including a split-off of its mobile unit, which has been losing market share to rivals such as Nokia (NOK1V.HE: Quote, Profile, Research) and Samsung Electronics (005930.KS: Quote, Profile, Research).
Reed, who took over as head of the mobile phone unit last Summer, will stay at Motorola and work closely with Brown, spokeswoman Jennifer Erickson said on Sunday.
Motorola has been criticized for a weak phone line-up and failing to come up with a strong successor to its Razr phone.
The company also faces pressure from activist investor Carl Icahn, who has said he would nominate four directors for Motorola's board this year. Icahn said in a television interview on Friday that he wanted new management for the mobile division.
Greg Brown took over as CEO in January, replacing Ed Zander.
Motorola on Jan. 23 warned it may lose more market share and post an operating loss this quarter as its cellphone business is taking longer than expected to turn around.
It also backed off its forecast for its mobile devices division to return to profitability in 2008.
Motorola forecast a first-quarter loss per share from continuing operations of 5-7 cents, before restructuring costs. Analysts had expected a profit of 9 cents per share, according to Reuters Estimates. (Reporting by Sinead Carew; Editing by Jan Dahinten)
© Reuters 2008 All rights reserved
February 13, 2008 8:28 AM PST
Motorola hopes to revive cell phone biz
Posted by Marguerite Reardon
BARCELONA, Spain--Motorola still believes in its handset business and is looking for ways to revive it, Don McLellan, Motorola's senior vice president for corporate development and strategy, said during a one-on-one interview at the GSMA Mobile World Congress this week.
Motorola understands the value of its brand, which has been over 80 years in the making, McLellan said. But when the stock dipped to around $10 after the company reported disappointing fourth quarter earnings in January, he and his fellow executives had to do something to show investors, employees, partners, and suppliers that they understood the stock was undervalued and that they were working to fix the problems, he said. A week later, executives said they were reviewing strategic options, including possibly separating Motorola's handset business from the rest of the company.
"We realized the value of the handset business wasn't being recognized," McLellan said. "So we recommitted ourselves to fixing the problem."
While that may be the case, the public disclosure of the review has confused some people in the industry, including many journalists, who have assumed Motorola is looking to sell the handset business. Earlier this week, Greg Brown, Motorola's CEO, told the Reuters news service that he is committed to Motorola's handset business. McLellan reiterated that point in our discussion, although he would not specifically rule out selling the company.
The crux of Motorola's problem is that it hasn't been making phones that people want to buy. In the last quarter, the company's market share dipped to 12 percent. A year ago, Motorola had market share of 20 percent. The last hit phone it had was the Razr.
McLellan recognizes Motorola's challenges. And he said that the company must first and foremost concentrate on making phones that people want to buy. Of course, he and the rest of the Motorola team also understand that this will not happen overnight. Brown said on the company's earnings call that it could be 2009 before Motorola can turn around the business.
The company's lackluster handset announcements at Mobile World Congress this week were strong evidence that the company isn't yet ready for a comeback. The Z6w looks like a Rizr clone, but it supports Wi-Fi and includes a 2-megapixel camera, and a music player. Motorola also announced the W161 and W181, two basic candy bar phones for the low end of the market.
Products Motorola introduced in May also haven't been a huge success. Mostly these phones were nothing more than souped-up versions of previous models that now had 3G, or third-generation, network support.
While simply developing cool new handsets sounds like a simple solution to Motorola's problem, in practice it's not that easy. The problem is that as Motorola loses market share it also loses its scale, which makes it more difficult to make money based on its current cost structure. The "strategic review" will hopefully help Motorola and its partners figure out how to realign its cost structure. Before the company even announced it was thinking of alternatives, it had renegotiated a deal with its chip supplier Qualcomm. As Motorola figures out how to structure its costs, McLellan said, the company can reinvest that money in developing new handsets and getting them to market.
McLellan said the review process has already opened the door to several partners who want to talk about ways to fix the business. But he declined to comment on reports that the company is looking to sell off its infrastructure business to Nortel Networks.
As for how long the strategic review will last, it's hard to tell, McLellan said. One thing is for certain, though: Motorola has a lot of work ahead of it.
NOOOOOOOOOOO ALL MY MOTOPOINTS WILL BE FOR NOTHING!!!!
i doubt this will happen. they have gotta pick up the slack theyve created though. in aus they only have a handful of new phones around. they really need to work harder to stay in the game in this day of age. still hope they dont fall arse over.
Im not arsed if motorola falls into its grave, i hope orange uk follow them
when the batteri is low, when i have not signal (network) or when i turn of my moto, it make that same sound. something like "probop". result it was stolen and tunr off, i though i have no signal and waited that the signal come back again hoooo. it was the last time i heard that boring sound
they make nice designe, and even nokia copy their slim style.
i hope this news is a rumor
anyway it won't be goog for us if moto go, even if you never buy their phone. yes. competition.
Moto phone are good for modding....but moto is really stupid for not supporting Moto modding......
imoto would sound great...I am a moto lover and it is so sad to read this article...I like iphone....so, I hope mac can buy Moto....so there would be IMOTO to offer the world...Yehey!
siemens and philips have sold their mob. div.. still their brand goes on new sets. eg. the new sets featured on this page are both philips.so also,what has happened to alcatel? all the three brands are presently owned by companies with lesser wherewithal and so also lesser reach. am i right?
MotoBerry, that's where it's gonna go. RIM has more money than god and no conventional phone division.
Well, I also acknowledge the numerous firsts and successes of other mobile phone brands out there. Motorola is really lagging behing the software segment but it's still the best in hardware. If Nokia got the brains, Motorola got the looks and the brawn. Some people just compare a full-fledged smartphone with a fashion-multimedia phone. Motorola phones are mostly intended for class, not for function. It's not that fair for me.
As I have said Motorola will not sell its mobile division, just reconsidering its strategies and keeping quiet for some time. Then it will come back with a vengeance.
Don't also blame Motorola alone for its RAZR incarnations, Zander just liked the whole craze and forgot to update. And as for the RAZR design, lucky Moto only copied its own designs, not other's (at least for most of its phones).
Am a hardcore user of Nokia anyway but Motorola is still the king...
if they sell its mobile division, it will be the heart breaking moment for all cell lovers. nothing but for me..
may be the true cell passion is over....
i wish motorola would team up with benq and wnd so the log would look like B-M-W
what's the improvement with V8?try step on it,it is simple indestruct-able....i wont break even when i step on it,it's a solid build phone!that's what improved!
I am quite shocked at this news
If they change the stylish "M" Logo and name MOTOROLA,They will be ruind in the mobile phone market in a year or half or soon
Remember the Benq-Simens
well i used to have a motorola phone.
well here is my opinion on this whole thing.
motorola was 1 of the top phones in 2005 and 6. than other companies started comming out with more high end phones and motorola did no and it stuck to 1 design for all phones(razr). which is very nice, but only for a while.And technology is another issue which motorola lacks. it is very clear that motorola is trying its best to promote its brand but its abit too late. But the only way that motorola can make a come-back is by coming out with a unique desing and putting in 1 of the best technology that it has and promote it in man ways. the other thing about motorola is that the camera is not goood and does not produce a clear image. even a 2meg phone is the same as 1.3meg or even vga. sorry to say that... but hopefully with the merge of KODAK AND MOTOROLA things will change for the better and imrove its camera quality.
Do send me back feedbacks on this matter
my email add is:
my sister and i were looking at the v8 display unit at a motorola store and she commented that why does it seem a step backwards, with the screen too small for the frame and the phone itself bigger than the original razor.
although i'm a motorola fan, i have to agree with her, why create all these razor clones? why has motoral become stuck in the razor quagmire?
i was looking at my friend's samsung u600 and realized how outmoded my moto k1 looked compared to it...
Not going to happen.....just some fake report......shame on you, GSM Arena......
While everybody raves about the Nokia UI's ease of use, I think the Motorola UI has some pretty strong plus points. For example, the Motorola's messaging system will always default to whatever you set it to (T9 predictive or normal) so that when you return to it you can type quickly according to what you're used to. The Nokia S40 system does not do this: if you left it in non predictive mode (sometimes I use it in combination with the predictive mode) and forget to reset it, the next time you type a message quickly you tend to forget that it's in the wrong mode! Also, Motorolas have very good bluetooth implementation: it will switch on automatically once it detects a paired device and auto switch off as well. With Nokia, you need to go into the menu to switch the bluetooth on and off. If you forget or can't be bothered, it will drain the battery in no time. Finally, I think Motorola phones (at least the Razrs) are much better made than Nokias which are usually more flimsy and have screechy loudspeakers. Even the 6500 classic has a really flimsy, thin plastic back cover which is definitely not aluminium.
The V360 was indeed quite a gem for the price. Camera, bluetooth, MP3 ringtones, miniUSB charging port, and a memory card! The only problem I saw with it was it was a little fussy when it came to different brands of memory cards and it came triband, but the latter could be easily seem editted to quadband.
Motorola may not be going anywhere though, but they really need to bring out some phones that will get people interested in them again. The E8 looks promising but they need more than 2 phones.
To nicksti - you're right. I have a used V360 - it took me a couple of days to learn how to actually use it, but now I wouldn't trade it for anything as it's faster (Shortcuts!), more intelligent and convenient than any other phone I've had in my hands. Never had reliability issues, and everything is where I expect it to be. As a bonus, the phone looks really nice. Technology without emotions doesn't amount to much. Motorola has some technology and some emotions, while other brands offer just technology.
Look at it like this: if cell phones were cars - Nokia would be a VW (heartless, efficient, advanced, bestseller for the masses). N-Series would be a VW sports subdivision (Porsche). SonyEricsson would be something like ToyotaFord and the Corean brands... well, Corean brands. Motorola would be something like Alfa Romeo. Sure it's not hi-tech like the others, but you can talk all day how your VW has all the gadgets and fuel efficiency, it's not the same as when you have an Alfa in front of your house (or on the road). Sure it'll probably break down sooner than a German car, but it's cheaper to repair than a car :-)
Nokia? Sorry to say, but my IQ is tested at 140 and Nokia menus (if they can be called that) are just an insult. Three minutes and I've seen it all and I've seen nothing interesting. Of course Motorola isn't for everyone, especially not for the shallow, non-creative and superficial (as for myself - I'm a musician and a music journalist), and damn, they could have already offered the better cameras and all that. And most of them today have the RAZR keypad. They used to have original designs, and a few years ago they offered the best value for money. Not with RAZR, though, that one was meant as a luxury product and never was meant to be sold in such high quantities. And all the haters out there only know about the V3, it seems.