Zander goes, but Motorola's troubles remain
When it's time to change, you've got to rearrange. (A very wise person once said that--I believe it was one of The Brady Bunch.) It's certainly time to change at Motorola, where late last week embattled CEO Ed Zander bowed to the inevitable and announced he will resign his post January 1, with COO Greg Brown now grabbing the helm. History will not judge Zander's four-year tenure kindly--after greenlighting the now-iconic RAZR, which sold in excess of 100 million units, he seemed content to let Motorola coast on autopilot, emphasizing market share at the expense of profit margins. The company now lags some distance behind Nokia and Samsung in global handset sales, with no turnaround on the horizon.Â
The chief question facing the post-Zander Motorola is exactly how much it needs to rearrange. The answer: All of it, at least according to billionaire investor Carl Icahn, who holds about 3 percent of the company. Icahn, who unsuccessfully sought a Motorola board seat in an attempt to force Zander out, said in a statement his nemesis' departure is by no means the only step necessary to correct the "major problems" facing Motorola. "The best opportunity for the mobile devices business to attract top flight management and to prosper and grow is to establish it as a standalone business," Icahn said in a statement. "In my opinion, Motorola should be split into separate companies: a mobile devices company; an enterprise mobility company; a connected home company; and a company focused on mobile networks infrastructure."
But splitting Motorola into a series of smaller entities does nothing to alter the fundamental issues plaguing the mobile phone business that remains the heart of everything the company does and is. Motorola is fundamentally out of step with the mobile industry it once defined--the RAZR seems like a lifetime ago, a now-distant ancestor of Apple's iPhone and other cutting-edge devices, and the organization has done little to embrace the multimedia services and applications that increasingly define the identity of market leader Nokia. Greg Brown is the safe, seamless choice to take over, but playing it safe is exactly why Motorola is in the predicament it's in. What Motorola needs is new blood, outside-the-box ideas and a fresh start--in short, it needs revolution, but as usual, it settles for evolution.Â -Jason