Motorola's Train Wreck

Motorola's (MOT) news keeps going from bad to worse. The company announced a $397 million loss and 3,000 more job cuts as sales fell 15%. 

The once-great company has been unraveling the past couple of years, as I detailed in a story for Portfolio. The new executive team of Greg Brown and Sanjay Jha was supposed to turn around the cell phone division and eventually split it off from the rest of Moto, but things have only deteriorated under the co-CEOs and the split is nowhere in sight.

Interesting, in his comments about the cell phone division, that Jha talked about how Motorola designers have focused too much on making "bright shiny objects" and instead need to make devices that work easily. While working on my Moto story, several sources noted that the iPhone has helped usher in an era in mobile devices that plays against Motorola's culture. Moto is a good hardware engineering company. It's a terrible software company.

Until recently, the pizazz in cell phones was all about hardware -- making them smaller and cooler-looking. But post-iPhone, the pizazz is in what a device's software can do. That's the big lesson of the iPhone App Store.

Comments

[wayne6:]

I had a MOT cell phone a few years ago that couldn't make a reliable connection to the charger. As an electrical engineer I can only assume incompetence is the reason for failing such a simple thing. I never bought another MOT cell phone and most likely never will.

2008 Nov 01 10:01 PM

[i39gy783jf5:]

Another useless, 'Master of the Obvious' bloatwrite from this guy. SA has to many incompetents that tell us absolutely nothing.

Kevin, quit it ... stop writing. You don't have the mental equipment to be of any value to anybody.

2008 Nov 02 05:13 AM

[edog:]

Sanjay Jha has been with Moto a matter of months. How much impact did you expect? He's an executive, not the Messiah.

2008 Nov 02 03:10 PM

[EC:]

Ha! to expect ANYONE to come in and make such drastic improvements (within a quarter...) is to drink the kool-aid that you write about...

Not sure one can actually summarize the challenges and optimal course of action in a 198-word article...

2008 Nov 02 07:01 PM

[T-money:]

Kevin, Sanjay has come in and within 90 days, he has implemented the most drastic change this company has ever seen. His changes required some huge write downs this quarter but for goodness sake, give him some time. To say that things have gotten worse under his watch his just simply untrue. Meanwhile, the other two divisions of Motorola that Greg Brown runs continue to post record earnings each quarter. They are hitting on all cylinders. I appreciate anyone's opinion but please get your facts straight before posting something.

2008 Nov 04 10:15 AM