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Zander: Moto knows what to do

Ed Zander, Motorola Inc.’s CEO, is under pressure. And it shows.
The first statement is a widely recognized fact and the second is an impression-but both were palpable during Zander’s appearance via Web cast this morning at Goldman Sachs’ 2007 Technology Investment Symposium in Las Vegas.
Zander often sped past direct answers to questions from the moderator and audience with brisk and somewhat disjointed explanations of the company’s plans. Confident statements that he and his executives understand the company’s challenges were often followed by repeated pleas to analysts and investors for understanding the difficulties of, in essence, making a U-turn in a company that is more like a Humvee than a BMW.
“It’s a hard business to stay on top of your game quarter after quarter,” he said early in the presentation. “You have to have an almost maniacal focus.”
Later in the hour-long session, he said, “We gotta get back to work and earn back your respect. It’s not easy.”
Twice during the session, Zander sighed audibly, once after alternately bemoaning Apple Inc.’s iPhone pre-launch publicity and then praising the product.
Zander’s apparent difficulty in giving simple, direct answers to questions about the vendor’s plans and goals and timing may well stem from his self-described hectic schedule in the wake of dismal fourth-quarter earnings and the departure of his top lieutenant, Ron Garriques, from the leadership of Motorola’s bread-and-butter mobile devices division.
His absence at the 3GSM World Congress last month was due to a board meeting, he said. And he would be back at work this afternoon at Motorola’s headquarters in Libertyville, Ill., which he said was “halfway between the North Pole and Chicago.”
Zander did not mention, but his performance seemed to reflect, concerns that he may have a backseat driver while attempting a company U-turn. Carl Icahn, the billionaire investor, notified Motorola this week he may expand his current 1.4 percent stake in the company as he seeks a seat on its board of directors.
Motorola’s board will be comprised of 11 people, rather than the typical 13, when Motorola holds it annual meeting on May 7-two members stepped down this week. Indra Nooyi joined the board in 2002 when she was chief financial officer at PepsiCo Inc. and has been named CEO and chairwoman, a fact she cited in resigning her Motorola seat. The other director, H. Laurance Fuller, is retired co-chairman of BP Amoco plc, and will retire one year early from his seat, which he has held since 1994.
Despite an uneven performance this morning, Zander managed to get across a few messages, sprinkled with color. Motorola henceforth will focus on achieving a profit on every device sold rather than relentlessly pursue market share, he said. The company needs to refresh its portfolio and pursue 3G markets in order to generate the profits needed to invest in developing distribution channels in emerging markets. Meanwhile, it will squeeze cost savings from the design of each of the handsets in its low-end portfolio to improve gross margins.
Zander attempted to assure his audience with the familiar mantra that “good things are coming” in Motorola’s product lineup this year and he apparently brandished a number of the vendor’s newest devices to illustrate that “we still have the best product lineup in the U.S.” But, perhaps disconcerting to his audience, the Motorola CEO also resorted to extolling the virtues of the Razr’s continued sales success, while acknowledging the effect that the discounted product had had on Motorola’s profits.
“I still think the Razr as we know it today can make more money,” he said.
When the Goldman Sachs moderator ended a brief question-and-answer period to close the session, Zander did not disguise his pleasure at the chance to return to Libertyville and the real work ahead.


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