OCTOBER 29, 2008 Motorola Speed Dials Cell Overhaul New Mobile Chief Plans to Slash More Jobs, Focus on Google Software to Simplify Design and Cut Costs
By SARA SILVER Wall Street Journal http://online.wsj.com/article/SB122523624204277979.html?mod=testMod Motorola Inc.'s new cellphone chief is moving quickly to scale back the struggling division, simplifying the way it makes devices and cutting additional jobs. Sanjay Jha, who also became Motorola's co-chief executive in August, has decided to focus on Google Inc.'s Android operating system as the software platform for Motorola's showcase phones, according to people familiar with the matter. Mr. Jha is expected to detail his plans -- which will likely include thousands of layoffs -- as early as Thursday when the company reports earnings, these people said. The company has announced 10,000 job cuts since early last year. Motorola declined to comment. Mr. Jha, 45 years old, is tasked with restoring the profitability of Motorola's mobile-devices division, which lost an average of $12 for each of the 28.1 million phones sold last quarter. He is betting on Google's Android operating system and just two other software platforms to speed development of sorely needed new models. He plans to jettison at least four other platforms, limiting the number of employees required to do customization work for different wireless carriers. This means Motorola may scrap dozens of phone designs that are in development, potentially leading to product delays in the coming quarters. Motorola hired the Indian-born and United Kingdom-educated executive from chip maker Qualcomm Inc., where he oversaw development of software that ran the Google system. In his first three months at Motorola, Mr. Jha has focused on Motorola's technical problems, which include an unwieldy supply chain. Unlike rival Nokia Corp., which uses just two operating systems for most of its handset designs, Motorola has relied on more than a half dozen operating systems. Mr. Jha told Motorola employees in late September that he would winnow the number of platforms down to three. Motorola will build midtier devices with Internet capability and other multimedia features around Google's Android. It will base business-focused devices on Microsoft Corp.'s Windows Mobile, currently used on its Q smartphone, and use its own platform, P2K, for low-end phones, according to people familiar with the matter. It is also looking to outsource production of at least some Windows Mobile phones, these people said. Motorola isn't expected to deliver an Android-based phone until next year, according to people familiar with the matter. Indeed, its decision to opt for Android as its main platform means Motorola will be playing catch-up with manufacturers such as HTC Corp. of Taiwan, whose G1 phone went on sale this month from T-Mobile USA Inc. Motorola is hoping that the open-source Google platform can attract developers of sophisticated applications to stave off the threat of Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry. The decision to streamline its technology comes as Motorola is preparing to split itself into two companies. It wants to stabilize its unprofitable cellphone division so it can be separated from the rest of the company, which makes cable set-top boxes, public-safety radios and other telecom gear. If Mr. Jha succeeds in making mobile devices an independent company by late 2010, he stands to earn around $100 million over three years and would receive 3% of the new company's stock. If he does not, he is still set to be paid an additional $30 million. Within days of arriving, Mr. Jha told employees gathered at the mobile-device division's Libertyville, Ill., headquarters, that he was proud to be a part of the pioneer in wireless communications, and asked employees to focus on developing the applications and services that could restore Motorola's leadership. By late September, however, Mr. Jha noted that the company's problems were more basic, ranging from late deliveries to clumsy user interfaces. Mr. Jha told employees his wife carried an LG Voyager and refused his offer of a Motorola phone. She, like other consumers, didn't want to have to read a user's manual to figure out how to use it. "When my wife switches, then you'll know," he said, according to a person at the meeting. The mobile-device division has two to three times as many employees working on a single project as its competitors, Mr. Jha told employees. "We have to create a well-run factory," he said at the meeting, according to the person present. Mr. Jha has taken a more distanced approach to sales, where the downturn and delays in refreshing Motorola's product line have limited the staff's ability to meet earlier estimates. Mr. Jha has restricted his visits to a few important partners, including Google, calling others by phone to introduce himself. "I'd love to come see you, but first I have to figure out what to tell you," he told the head of a European carrier. "My hands are full." -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
