Greg Brown becomes new Motorola CEO
Motorola’s CEO Ed Zander will step down after he failed to turn around the mobile-phone business. President Greg Brown will take over the post.
By Bloomberg |
NEW YORK: Motorola’s chief executive officer Ed Zander will leave the post after he failed to turn around the mobile-phone business.
Zander, 60, will step down on January 1 and president Greg Brown will take over. Zander will remain chairman until the annual investor meeting in May, Schaumburg, Illinois-based Motorola said in a statement on Friday.
Motorola slipped to third place in global mobile-phone sales under the leadership of Zander, a Brooklyn-born engineer who earned his business degree through night courses. Sales dropped after he failed to introduce a phone to repeat his success with the best-selling Razr, losing customers to Apple and Research In Motion.
“This man got the company into a pickle,” Joan Lappin, president of Gramercy Capital Management in New York, said before the announcement. “They’re losing money and they’re continuing to lose share, and he’s put the stock in the dumper.”
Lappin called for Zander’s resignation earlier this year and sold her firm’s Motorola shares last year.
Motorola shares have lost 24% of their value since January 4, 2007, when the company first missed forecasts for sales and profit.
Zander joined Motorola in January 2004, winning the top job amid competition from President Mike Zafirovski, who left in 2005 to head Nortel Networks. The all-metal Razr came out months after Zander took over and has since sold more than 100 million units, the most of any Motorola product.
As the prestige of the sleek phone started to fade, Zander last year resorted to price cuts to compete with new video and music phones from Nokia Oyj and Samsung Electronics as well as e-mail phones from Research In Motion.
Nokia, based in Espoo, Finland, has since increased its market share lead over Motorola to its widest since 2004. Suwon, South Korea-based Samsung overtook Motorola to become the world’s second-largest mobile-phone maker in the second quarter.
The company got more competition when Apple introduced its iPhone, which blends the iPod media player with an e-mail- equipped handset, on June 29. Apple, based in Cupertino, California, sold out of the iPhone at most of its stores less than a week after the product’s debut.
The CEO announced 7,500 job cuts this year in a bid to shave $1 billion off costs and restore profitability. The actions weren’t enough for investors such as billionaire Carl Icahn, who criticised Zander for failing to revive sales. In May, Zander defeated Icahn’s bid for a seat on the board.
Zander, 60, will step down on January 1 and president Greg Brown will take over. Zander will remain chairman until the annual investor meeting in May, Schaumburg, Illinois-based Motorola said in a statement on Friday.
Motorola slipped to third place in global mobile-phone sales under the leadership of Zander, a Brooklyn-born engineer who earned his business degree through night courses. Sales dropped after he failed to introduce a phone to repeat his success with the best-selling Razr, losing customers to Apple and Research In Motion.
“This man got the company into a pickle,” Joan Lappin, president of Gramercy Capital Management in New York, said before the announcement. “They’re losing money and they’re continuing to lose share, and he’s put the stock in the dumper.”
Lappin called for Zander’s resignation earlier this year and sold her firm’s Motorola shares last year.
Motorola shares have lost 24% of their value since January 4, 2007, when the company first missed forecasts for sales and profit.
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They rose 60 cents, or 3.8%, to $16.25 in early trading. They added 9 cents to $15.65 on Thursday in New York Stock Exchange composite trading.Zander joined Motorola in January 2004, winning the top job amid competition from President Mike Zafirovski, who left in 2005 to head Nortel Networks. The all-metal Razr came out months after Zander took over and has since sold more than 100 million units, the most of any Motorola product.
As the prestige of the sleek phone started to fade, Zander last year resorted to price cuts to compete with new video and music phones from Nokia Oyj and Samsung Electronics as well as e-mail phones from Research In Motion.
Nokia, based in Espoo, Finland, has since increased its market share lead over Motorola to its widest since 2004. Suwon, South Korea-based Samsung overtook Motorola to become the world’s second-largest mobile-phone maker in the second quarter.
The company got more competition when Apple introduced its iPhone, which blends the iPod media player with an e-mail- equipped handset, on June 29. Apple, based in Cupertino, California, sold out of the iPhone at most of its stores less than a week after the product’s debut.
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The CEO announced 7,500 job cuts this year in a bid to shave $1 billion off costs and restore profitability. The actions weren’t enough for investors such as billionaire Carl Icahn, who criticised Zander for failing to revive sales. In May, Zander defeated Icahn’s bid for a seat on the board.
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