Moto’s executive exodus

There must be hardly anyone left at Motorola’s troubled handset unit, given the two latest senior figures to quit the company.

Last week, Stu Reed, president of Motorola’s Mobile Devices business, announced his departure, just days after marketing chief Kenneth ‘Casey’ Keller. Reed and his team are credited with launching a number of key handset initiatives, which Moto said it will continue to expand upon.

Well, with the handset unit effectively running on autopilot, it looks like the plan is to run out – yep, you guessed it – another incarnation of the RAZR. I just got an announcement from 3 UK, which says 3 is to reintroduce Motorola handsets to its range for the first time in over 18-months with the RAZR2 V9. Apparently, this one’s even slimmer and tougher than its predecessors. But didn’t we get over this whole size zero thing already?

C’mon guys, since the heady days of the first RAZR super hit, back in 2005, the handsets division has consistently underperformed, failing to come up with another blockbuster device. Moto’s reluctance to give up on the RAZR kind of reminds me of The Onion story about Gillette in the real razor industry – “Let’s add another blade and take it to five. And another aloe strip. That’s right. Five blades, two strips, and make the second one lather.”

As we already reported, fourth quarter sales at the Mobile Devices division were down 38 per cent to $4.8bn with operating loss dropping to $388m, compared with operating earnings of $341million in the year ago quarter. During the last three months of 2007, the company shipped 40.9 million handsets. For the full year, Motorola in its entirety, recorded a net loss of $49m, compared to a profit of 3.6bn in 2006, largely due to the ailing devices segment.

And corporate raider Carl Icahn is maintaining pressure on the company, increasing his holding by 1.3 per cent to 6.3 per cent.
Icahn also intends to nominate a slate of four directors to stand for election at the company’s 2008 annual stockholders meeting. Last year, the billionaire businessman failed in his bid to win a place on the board of Motorola, but he’s still after a seat one way or another. Moto’s already taken his advice on board and is looking to offload its handsets unit, it’s just finding a buyer for the division that’s the trouble.

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