Tuesday, August 5, 2008

Motorola Names Leader for Mobile Phone Unit

MOTOROLA, struggling to design a popular line of cellphones, tapped a semiconductor industry executive, Sanjay K. Jha of Qualcomm, to head its troubled mobile phone division and share chief executive duties for the entire company in an unusual power-sharing arrangement.

Seokyong Lee/Bloomberg News

Sanjay K. Jha will be co-chief executive for the entire company and lead the mobile phone unit.

Motorola said Monday that it named Mr. Jha chief executive of the mobile phone division because of his operational experience and talent for managing change.

He will also share the title of co-chief executive for all of Motorola with the current chief executive, Gregory Q. Brown.

Mr. Brown was also given the title of chief executive of Motorola’s home and business broadband business, the other, more successful, part of Motorola’s business.

For several months, Motorola has been seeking a leader who could inspire innovation in its money-losing mobile phone unit. The company, based in Schaumberg, Ill., had been a leader in the cellphone handset industry, but lost momentum when designers and engineers failed to come up with a successor to the popular Razr phone.

Mr. Jha, analysts agree, is an experienced operations executive steeped in the mobile phone business and his appointment is a step in the right direction. He most recently served as chief operating officer at Qualcomm, the San Diego-based maker of chips used in handsets. There he was responsible for corporate research and development, including its Flarion unit, which created advanced fourth-generation wireless technology that makes it easier and faster for consumers to surf the Web.

“He doesn’t get a lot of headlines, but he is one of the key players at Qualcomm,” said Roger Entner, a telecommunications analyst for Nielsen IAG, a market research firm.

Investors applauded his appointment, driving shares of Motorola up 11.46 percent, or $1.01, to close at $9.82.

But one important question remains for Motorola: Is Mr. Jha too little, too late?

While Mr. Jha provides a much-needed injection of knowledge about the mobile Web, he is an unusual choice because his background is in cellphone semiconductors, not mobile phone design.

And it is the look and feel of Motorola phones where many analysts agree Motorola must focus its efforts if the company is to thrive.

“He’s a great operations guy and Qualcomm is a great training ground,” said Michael King, a research director at Gartner. “But I’m surprised they did not pick someone with more imagination in devices. I’m not sure whether a semiconductor guy does the trick. Can he green-light the next five great devices consumers want?”

Mr. Jha said in an interview that he did not know yet what was needed at Motorola to spur innovation, while not gutting the entire corporate culture and putting a new one in place. He said he will take 90 days to review the unit’s operations.

“That’s a balance I need to strike,” he said. “But I would not have taken this job if I did not believe in the organization.”

He said too that Mr. Brown, as sole chief executive since last December, “put in place a road map” for the mobile phone division to follow, including 34 new mobile devices in the second half of this year.

“My job is to build on that,” Mr. Jha said.

It won’t be easy. Morale is at a low as the company’s market share has slipped. Analysts contend even new products, like the Moto W755 mobile music phone for Verizon Wireless, are only so-so and have low hopes for anything on the horizon.

Mr. Brown said last week, after announcing sales fell 22 percent for the mobile device division in the second quarter, that the unit needed to produce more predictable results.

“Sanjay has a keen discretionary eye,” Mr. Brown said in an interview. “He sees things for what they are and changes things that need to be changed.”

Mr. Jha’s job is made a little easier because he knows a number of Motorola’s top executives who dealt with Qualcomm, a chip supplier to Motorola. He has met with — and says he has secured the support of — representatives of Carl C. Icahn, the investor who agitated for and won two seats on Motorola’s board after running a vocal campaign criticizing Motorola’s management and strategy.

Mr. Jha’s operational background should prove helpful if Motorola proceeds with its plans to spin the mobile phone unit into a separate, publicly traded company next year.

But shared-power arrangements, like the one with Mr. Jha and Mr. Brown, often lead to difficult management situations.

Mr. Brown acknowledged there will be “gray areas” where their authority will overlap. But, he added, “unique times call for unique structures.”

“I am optimistic that we will be good partners so, collectively, we make better decisions,” he said.

For his part, Mr. Jha said, “You can put any situation in place and it works because you make it work.”

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