Motorola CEO Ed Zander Steps Down

Ed Zander will step down as CEO of Motorola on January 1, 2008, and be replaced by current COO Greg Brown, after telling the media he's moving on the the "next phase" in his life, and wants to spend more time with his family. Zander will be retained by the company as advisor to Brown through 2008. Zander's time at the telecommunications equipment company was marked by the success of its hit Razr phone, followed by a rapid decline as the company failed to follow up with newer models and other phones grabbed market share. It is still unclear how much will change with Brown in command, as he was Zander's choice for successor, but clearly the company will have to step-up its technology and offer consumers phones with more features if it wishes to remain competitive. "We've made a lot of changes and progress this year," Brown said. "I recognize the urgency and intensity. We're not standing still." Brown pointed out that half of the officers in the company have been replaced in the last couple months and the company has redirected its Engineering and Products group. Still, questions about Brown will remain until shareholders see real progress. "Shareholders are grappling with two things," said Bill Choi, an analyst at Jefferies. "There's a relief rally in that the CEO succession plan has been made. But I'm still not quite sure if Brown is big enough to take Motorola to the next level." Shares of Motorola rose 2% $15.97 Friday.

Sources: Wall Street Journal, Bloomberg
Commentary: The Pressure's On for Motorola – Barron's • CIBC Analysts Forecast Flat Demand for Motorola's RAZR2
Stocks to watch: MOT. Competitors: AAPL, NOK, RIMM. ETFs: BDH, IGN
Earnings call transcript: Motorola Q3 2007

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Comments

[reinharden]

They don't need phones with more feature, they need phones that work better.

After trying several Motorola phones, my girlfriend now cringes at the mention of the word Motorola. She really liked the appearance of the RAZR but found using it appallingly bad. I can't say that I disagree.

I use to love MOT phones because they worked well without getting in your way. Now MOT, NOK, and Samsung have gone insane with adding features, but making it hard to get to even the simple things without having to read the manual.

I'm not even sure whether or not the iPhone had a manual...

reinharden

[jonreagan]

Totally agree with Reinharden's comments...we've fallen into a culture of "more is better", the result being that many product features are totally inane, adding little or no value for the consumer. This is a major problem for technophobes.

I wondered aloud a few weeks ago that we now have life coaches, fitness trainers....why not technology coaches? They'd show you what devices you really need, and how to become proficent at using them. Subsequently, I read in the WSJ that AAPL (who else?) offers personal trainers in their stores, who will train you in the use of their products, for a modest fee. Once again, I think this shows that much of Apple's success owes to the fact that they're in touch with what average consumers want and need.

Which takes me back to the author's article on Motorola and Ed Zander. The man is an incompetent fool who probably couldn't run a hardware store, and totally unsuited to being CEO. Motorola's recent history would make a great MBA case study, illustrating the danger of a company resting on its laurels. Which takes me back to Apple, which seems to always have creativity and new products in the pipeline...the winners just keep on coming.