Zander's Turbulent Ride at Motorola Ends

Ed Zander, chairman and chief executive of Motorola Inc. is seen in Las Vegas in this Jan. 8, 2007 file photo. Motorola Inc. said Friday, Nov. 30, 2007, that Zander will step down as chief executive of the troubled cell phone maker on Jan. 1. (AP Photo/Damian Dovarganes, File) (Damian Dovarganes - AP)

"This is a company that is in need of new blood and new direction," he said.

The resignation left some observers wary about what it might signal about the turnaround effort in the cell-phone unit, which is bigger than Motorola's other, more successful divisions: home and networks mobility, its second largest, and enterprise mobility, which sells computing and communications equipment to businesses.

"While Mr. Zander's departure has been the source of speculation for some time, we had thought that an improvement in mobile devices could possibly grant him a stay," said Citigroup's Jim Suva in a research note. "We now wonder if today's announcement signals yet another disappointment for the handset segment and more meaningful changes that have to occur."

Brown, 47, joined the company in 2003 and had been groomed for the top job, serving as president and COO since March. Prior to joining Motorola, he was chairman and CEO of Micromuse Inc., a network management software company.

He was instrumental in Motorola's $3.9 billion acquisition this year of Symbol Technologies, a maker of barcode scanners and handheld computers, and its $1 billion divestiture of the automotive electronics business last year.

Asked whether he envisions a departure from the company's recent strategy, Brown said he would provide an update in early 2008 on the next steps planned.

"We've made a number of changes already," he told the AP. "We're focused on finishing the year and ensuring a smooth transition."

Analysts are looking less for a miracle from Brown than they are for some oomph from the company's 2008 handset models, which it is expected to unveil starting at the Consumer Electronics Show in Las Vegas in January.

"Motorola's problems extend behind its leader," Dave Novosel of the Gimme Credit bond research firm said in a note to investors. "The company sorely needs a refreshed product portfolio to capture the tastes of cell phone customers."

CIBC World Markets analyst Ittai Kidron called Brown a "solid operational manager" who isn't expected to bring drastic change, although other experts said another wholesale restructuring is possible.

Zander does not get severance because he resigned voluntarily, the company said. He will continue to serve as an adviser to the CEO through Jan. 5, 2009, and will receive his regular base salary and benefits until then.

Last year, he was paid $1.5 million in salary and $2.2 million in other compensation and was given stock or option awards worth $9.5 million.

Zander's stock options and restricted stock units also will continue to vest and be exercisable during that time.

Motorola shares rose 32 cents, or 2 percent, to $15.97 in Friday trading. The stock is down 22 percent in 2007 and 39 percent off its six-year high of $26.30 reached in October 2006.

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