Motorola’s mobile-phone division has been bleeding money since the start of 2007, reporting losses of $1.9 billion and falling to third in global sales. The company moved to turn things around Monday with the announcement that it is hiring a top executive away from Qualcomm to run the mobile-phone business.
Sanjay Jha will become co-CEO along with Greg Brown — an announcement that sent Motorola stock up for the first time in more than four years. Under Jha’s leadership, Qualcomm became the world’s top maker of chips for cell phones. Brown will be CEO of Motorola’s healthier broadband business, which makes cable TV set-top boxes and wireless networking equipment. Brown had announced plans to split the company in March. The split division will occur in the third quarter of 2009.
Analysts hailed the move. “They needed someone high profile with engineering talent, and certainly this guy fits the bill,” said Tavis McCourt, a Morgan Keegan & Co. analyst. “The only downside is that he doesn’t necessarily have any consumer products expertise.”
Meeting the iPhone Challenge
Jha’s first order of business: developing a device to compete with Apple’s best-selling iPhone. Motorola had a hit with the Razr, which sold more than 110 million units, but has been unable to come up with a follow-up product and has lost customers to Apple, Nokia and Samsung.
“In terms of actual products hitting the street, you’re not going to see [Jha’s] impact before 2010,” McCourt said. “Probably his biggest impact will be the level and type of engineering talent he will attract to the company over time.”
But Motorola will need more than just a winning phone, according to Tim Bajarin, principal analyst with Creative Strategies.
“Motorola will only be successful if this new team creates a complete solution that includes hardware, software and services similar to Apple,” he…