 | | Motorola news since the analysts meeting Tuesday
THE TICKER: MIDWEST BRIEFS
Motorola selects top strategy officer
http://www.chicagotribune.com/business/chi-0407280358jul28,1,4191715.story?c
oll=chi-business-hed
Tribune staff, wire reports
Published July 28, 2004
Richard Nottenburg on Tuesday was appointed chief strategy officer at
Motorola Inc., effective immediately. Nottenburg, who will report directly
to Chief Executive Ed Zander, has been a strategic adviser to
Schaumburg-based Motorola since January. Nottenburg has worked as a
professor of electrical engineering at the University of Southern California
and co-founded Multilink Technology Corp., which he took public in 2001.
++++++++++++++++
Reinventing Motorola
CEO Zander is shaking things up in a bid to make the company a tech leader
By Roger O. Crockett in Chicago
http://www.businessweek.com/magazine/content/04_31/b3894122_mz063.htm?chan=db
It takes Motorola Inc. employees about 30 seconds after they meet Edward J.
Zander to realize how different their new boss is from their last one. Where
Zander's predecessor, Christopher B. Galvin, was reserved, polite, and
genteel, Zander is a brash Brooklynite, incessantly pumping hands and
flashing his trademark mile-wide smile. Advertisement
But in March, three months after taking over the chief executive post,
Zander showed he also was going to be much more demanding. He gathered his
top 20 execs in the company's downtown Chicago offices, some 30 miles from
the Schaumburg, Ill., headquarters, for a two-day brainstorming session on
how to improve Motorola's lackluster execution. His message: Employees will
be held accountable for customer satisfaction, product quality, and even
collaboration among business units. "If you don't cooperate and work
together, I will kill you," he said. Today, Zander laughs: "That's
surviving-and-growing-up-in-Brooklyn talk. It was my way of saying, 'We're
going to fix this thing."'
Zander is about as affable as CEOs come, but he's deadly serious about
restoring Motorola to the top of the communications world. The tech veteran,
who spent 15 years at computer giant Sun Microsystems Inc. (SUNW ) and
eventually became its president, is trying to reinvent Motorola as a nimble,
unified technology company. His most dramatic effort to date is a plan to
dismantle Motorola's debilitating bureaucracy and end a culture of
internecine rivalries so intense that Motorola's own employees have referred
to its business units as "warring tribes." And he's not leaving it to
chance: He has made cooperation a key factor in determining raises and
bonuses. "It's a damn different place," says Patrick J. Canavan, a 24-year
veteran and Motorola's director for global governance. "Everyone is looking
out for everyone else."
The changes are just beginning. BusinessWeek has learned that Zander has
been exploring a major reorganization, and the first steps of the
restructuring may be unveiled at an investor conference in Chicago on July
27. By October, Zander hopes to abandon Motorola's stovepipe divisions,
which are focused on products like mobile phones and broadband gear, and
reorganize operations around customer markets -- one for the digital home,
for example, and another for corporate buyers.
The reorganization will help Zander deliver on several new initiatives.
Perhaps the most important is what the chief executive calls "seamless
mobility." The idea is that Motorola should make it easy for consumers to
transport any digital information -- music, video, e-mail, phone calls --
from the house to the car to the workplace. Mastering that technology would
do more than boost cell-phone sales. It also could make Motorola a key
player in the digital home, helping it sell flat-panel TVs and broadband
modems, home wireless networks, and gateways to manage digital content.
Separately, BusinessWeek has learned that Motorola is planning a major push
to sell more services to corporations. While Motorola sells communications
gear to corporate customers now, Zander sees an important growth opportunity
in managing networks for those companies. "We have to get more focused on
that," said Zander in an interview with BusinessWeek.
So far, Motorola is performing impressively under its new chief executive.
On July 20, the company reported that second-quarter sales surged 41%, to
$8.7 billion, while operating income rose five-fold, to $845 million. The
primary driver was the mobile-phone division, which boosted revenues 67%, to
$3.9 billion. Still, investors are looking for Motorola to get its
profitability up to the level of its rivals. Despite Nokia Corp. (NOK )'s
recent troubles, the operating margins in its mobile-phone business are 19%,
compared with 10% for Motorola. "Margins are still sub-par," says Barbara L.
Rishel, a senior portfolio manager for MTB Investment Advisors, a large
Motorola shareholder.
HONING A CONCEPT
No disagreement from Zander. Although he's unlikely to announce it on July
27, Zander is planning to trim costs in coming months by shedding employees,
according to insiders and analysts. He's also plotting management changes
that will bring in more handpicked people to help execute his plans. On July
20, Motorola said the head of its mobile-phone division, Tom Lynch, would
leave the company at the end of the summer. Zander declined to discuss any
details of cost-cutting or executive changes.
But investors that want Zander to jettison poorly performing businesses may
be disappointed. The CEO proceeded with the spin-off of Motorola's
semiconductor unit that had been put in motion before he arrived -- the deal
took place on July 16, despite upheaval in the chips market. Still, insiders
say he's impressed with the remaining portfolio of businesses, including the
$4.4 billion wireless infrastructure business that some analysts have
suggested that Motorola dump.
Instead, Zander is focused on reducing the number of separate businesses.
Analysts say he is working on a plan that could combine the wireless network
unit with the company's broadband division. By collapsing two units that
make equipment to route data through networks, Motorola could cut expenses
and smooth execution. Zander declined to comment on any potential
reorganization.
Just as important as the structural changes will be the strategy that goes
with it. The concept of seamless mobility was born on a flight to France in
February, when Zander and his chief technology officer, Padmasree Warrior,
were headed to a wireless-industry conference. The strategy has been refined
over the past few months until senior leaders from Motorola's business units
gathered last month at Motorola University, adjacent to headquarters, to
discuss strategies for internal development and potential acquisitions.
"YOU'RE SANDBAGGING"
The Motorola vision starts with users sitting at home watching, say, the New
York Yankees battling the Chicago White Sox. To leave home, they pause the
video, transfer it to their phone, walk into the garage and transfer the
video to the car as they drive away. The car would switch to audio so as not
to distract the driver and then switch back to video if the driver stops at
a traffic light. Motorola has the technology portfolio to pursue the entire
scenario. Besides phones and cable set-top boxes, it has a $2.3 billion
automotive-electronics business that develops technologies for cars to
communicate with outside networks.
The key will be beating rivals to market with innovative solutions. That's
why Zander's top priority has been improving execution. The main driver is a
new incentive plan. In the past, workers were compensated based on the
revenue, profit, and cash generated in their particular sector. If one
sector did well, its employees pulled in huge bonuses. A unit that didn't
perform got little or nothing.
Zander has been relentless in trying to get the most out of his staff. A new
bonus plan bases 25% on three key areas: customer satisfaction, product
reliability, and the cost of poor quality. When the heads of each business
unit first laid out their targets, Zander's no-nonsense roots showed:
"You're sandbagging," he barked. Before long, the targets were more
difficult. "We're driving for improvement year over year," says Michael J.
Fenger, a vet Zander picked to improve corporate quality.
If Zander can maintain Motorola's momentum, the years ahead look promising.
It's gaining share on the world's mobile-phone leader, Nokia, and the
elements of Zander's master plan have yet to take root. "It's a big ship,"
Zander concedes -- so it will take time to change direction. But it takes no
time at all to to see that Zander is committed to the challenge.
+++++++++++++++
Motorola chairman changing its DNA
By Anna Marie Kukec Daily Herald Staff Writer
Posted Wednesday, July 28, 2004
http://www.dailyherald.com/business/business_story.asp?intid=38196137
One Motorola Inc.?
Stay tuned.
Motorola Chairman and Chief Executive Officer Edward J. Zander said the
Schaumburg company's many divisions - spanning mobile phones to broadband to
government-related products - need to have one face for its customers and
the public.
Instead of operating separately, the divisions have started undergoing a
metamorphosis into one unified company, Zander told about 300 analysts
gathered for Motorola's annual meeting in Rosemont.
"Motorola's DNA is too fragmented," Zander said.
A cultural change is needed to increase customer satisfaction, to
re-invigorate the brand and to speed up product delivery, Zander said.
He also cited the biggest cultural change: spinning off a 50-year-old chip
division, Freescale Semiconductor Inc., which has about 23,000 employees.
Motorola's total global head count is about 88,000.
Some Motorola officials said this restructuring isn't targeting layoffs of
the rank-and-file workers.
However, about 30 senior managers have voluntarily or involuntarily left
since Zander took office in January. Zander, in turn, has raided General
Electric Co., IBM Corp., Nortel Networks Ltd. and others to attract 32 new
managers.
A new appointee announced Tuesday was Richard N. Nottenburg as chief
strategy officer. Nottenburg, a former vice president and general manager of
Vitesse Semiconductor Corp., already has served as Zander's strategic
adviser since earlier this year.
Nottenburg will oversee corporate strategy, mergers and acquisitions,
Motorola Ventures, business intelligence and new initiatives.
Zander said additional changes are possible but declined specifics. "Will
there be bigger changes? Maybe. Perhaps. Stay tuned," Zander said.
He insists that Motorola needs to change its 75-year-old culture, which
could take some time.
"You may not see them (the changes) every day, but they're going on," Zander
said. "Sometimes a company makes too much out of the organization, and not
enough about the customers. Who cares? You just want a great product."
Despite new products and contracts, and a better bottom line, analysts were
eager for more details about the reorganization, said Michael King, a
wireless analyst with Gartner in San Diego.
"It will take some time to attempt a change of Motorola's culture," King
said. "It also will take time to reflect that change. The issue is: Are they
going to bring those new people up to speed quickly enough to execute their
strategy quickly?"
In addition to a stronger customer focus, Motorola announced more major
contracts.
Motorola signed a $300 million, four-year deal with the U.S. Postal Service
for hand-held scanning devices, software and related equipment.
"Motorola is thrilled," said George Brown, Motorola's commercial, government
and industrial solutions division.
A first-time contract also was signed for infrastructure work throughout
Japan with Toyko-based KDDI Corp.
Other Motorola news included:
. Motorola is in a buying mood and has been targeting some prospects, but
declined to announce the firms.
. No sooner has Motorola been filling the globe with its sleeker, sexier 3G,
third generation, wireless mobile phones, it's already planning 4G, or
fourth generation, which could be available in a few years.
. A stronger emphasis will be on Motorola as a global company and it will
ramp up its presence and sales in China and India.
. Motorola will wind down on legacy (or older) electronic platforms as well
as duplicative research and development projects. It also plans to reduce
duplicative organizational functions, such as separate human resource
departments for the divisions.
+++++++++++++++
LATEST NEWS
12:47 PM CDT Wednesday
New Wi-Fi cell phone unveiled by Motorola
http://dallas.bizjournals.com/dallas/stories/2004/07/26/daily21.html
Motorola Inc. (NYSE: MOT), the world's second-largest maker of cellphones,
has introduced a new phone that it says can switch calls between cell
services and wireless Internet networks.
The CN620 Wi-Fi cell phone, which uses technology supplied by Dallas-based
Texas Instruments (NYSE: TXN), should be in stores by early 2005, making it
among the first in a new class of phones that promise to disrupt the cell
phone industry by reducing the number of minutes billed to customers'
phones.
Motorola employs more than 2,000 workers at production plants in the
Dallas-Fort Worth area and at its AllianceTexas distribution center for
personal communications products, near Alliance Airport in Fort Worth.
Motorola began working on the WiFi cellphone last year, when it struck a
deal with TI to use chips it had designed for the purpose.
Several companies have announced that they are at work on phones that will
let business customers switch calls from their cellular carriers to their
own company networks using short range wireless technology known as Wi-Fi.
Once on the network, callers will be connected using Voice over Internet
Protocol (VoIP), a fast growing technology that's already shaking up the
wired telephone industry by bypassing most of the traditional network and
its multitude of fees.
Support from signal carriers has been weak, so far. The problem of how to
ensure that customers are billed properly as their phones skip from one
network to another has yet to be worked out.
Motorola has not yet struck a deal with a wireless carrier to support the
CN620. Because the phone uses the standard GSM cell phone technology -- the
most popular in the world --- GSM carriers AT&T Wireless, Cingular Wireless
and T-Mobile USA are the most likely candidates in the United States to
support the phone.
Industry insiders say the technology is the wave of the future, however.
Equipped with the right software, WiFi cell phones could someday use a
home's WiFi access point to make phone calls using VoIP over the Internet,
rather than a traditional wired telephone line.
++++++++++++++++++
Motorola Phones To Get BlackBerry Services
Jul 28, 2004
http://www.americasnetwork.com/americasnetwork/article/articleDetail.jsp?id=106933
Research In Motion (RIM) has announced that Motorola is licensing technology
that will allow its cellphones to connect to RIM's BlackBerry messaging
service and software. RIM plans to enable BlackBerry connectivity on the
Motorola MPx and MPx220 mobile devices.
Through this licensing program, the Motorola MPx and MPx220 will be able to
connect to BlackBerry services, including BlackBerry Enterprise Server and
BlackBerry Web Client.
For the corporate customers, BlackBerry Enterprise Server software
integrates with Microsoft Exchange or IBM Lotus Domino and works with
existing enterprise systems to enable secure, push-based, wireless access to
email and other corporate data. For individuals and smaller businesses,
BlackBerry Web Client provides an internet-based email interface that allows
users to access multiple existing corporate and personal email accounts from
a single device. |