Zander's Turbulent Ride at Motorola Ends

CHICAGO -- Ed Zander is out as Motorola Inc.'s chief executive after a roller-coaster four years that saw him oversee the cell-phone maker's Razr-led resurgence but ultimately bear blame for strategic gaffes and product whiffs that led to its steep decline.

The company's announcement Friday that Zander is resigning as CEO and that President and Chief Operating Officer Greg Brown will succeed him Jan. 1 produced little surprise and a muted reaction on Wall Street. Industry experts voiced skepticism the change will produce a turnaround unless accompanied by a new wave of top-selling phones and other mobile devices.

Regardless, the departure will end a wild ride for Motorola under the fast-talking Brooklyn native, a former Sun Microsystems Inc. president who was widely praised for leading the slumping company's resurgence in 2004-05 and castigated for overseeing its slide since the second half of 2006.

The two-year run of success following the launch of the ultra-thin Razr phone began crumbling last year after sales slowed and the company admitted it had been trading profit margins for global market share by aggressively undercutting pricing.

In a little more than a year, the Schaumburg, Ill.-based company has endured the departure of high-level executives, a Carl Icahn-led proxy battle, a 40 percent drop in its stock price and a sharp decline in its global cell-phone market share to 13 percent from over 20 percent. It slipped from the No. 2 handset maker to No. 3 this year, behind not only Finland's Nokia Corp. but Samsung Electronics Co.

The 60-year-old Zander, who will stay on as chairman until the annual shareholders meeting in May, said the decision to go was his alone despite the severe criticism he received for the company's struggles and some calls for his ouster. He told The Associated Press that he had initiated talks with the board of directors about his succession months ago and said he had intended all along to stay only about four years.

"This is what I wanted to do," he said in a telephone interview.

"You'd like to leave when you're at the top of your game. ... You don't like to leave when you have a year like this with mobile devices," Zander said. "But I think we have enough structurally done with this company that when mobile devices does get back to its execution, we're a stronger company than we were four years ago."

Analysts, however, were dubious the board of directors would have given him the extension he needed to stay on as CEO after he reached the four-year mark at the end of December. He needed a strong company rebound to assure his standing with directors and shareholders, and progress in the third quarter was only modest.

Icahn, the billionaire financier who lost a bid in May for a board seat so he could force some changes, hailed Zander's resignation as a positive step but said Motorola should be split into four companies in order to get the most out of its potential.

"I believe that the steps announced today do not even begin to address the major problems at Motorola," he said in a statement.

Eric Jackson, a Naples, Fla., management consultant and Motorola shareholder who led an online campaign to fire Zander, applauded the departure.