Motorola's Zander Promises to Do Better

April 19, 2007

Motorola chief executive Ed Zander offered a litany of "we'll do better" in response to the company's many missed opportunities and mistakes over the past year, he said on a financial analysts' conference call Wednesday.

The key message: Motorola needs to focus "not just … on cool stuff and iconic design but marrying that with silicon, software and rich experiences," according to Motorola's chief operating officer, Greg Brown.

Motorola's been struggling, in my mind, in large part because they're relying on styles they developed in 2004: the RAZR, PEBL and derivatives such as the RIZR, SLVR and KRZR.

They announced 18 new products this quarter, according to executives on the conference call, but many of them sort of slide out of your mind: more KRZRs and more low-end W-series phones that many people will buy, but that aren't full of major innovations. On the higher end, the Z8 "kick-slider" Symbian video phone, the Z6 CDMA music phone and the Q9 smart phone for HSDPA networks like AT&T's lead the pack.

Last July, Zander spun a tale of a new platform, the SCPL ("scalpel") that would collect a whole bunch of new technologies, such as dual antennas and Nextel-style speakerphones, to push the whole industry forward.

On today's call, he only hinted at SCPL, saying "we have some techniques that take slider designs and candybar designs and add some technology that we think is going to be a breakthrough for us, which you'll see at the end of the year."

Looking to the buzz created by the iPhone, touch screens may also crop up in Motorola's line. The touch-screen MING handset has been a huge success in Asia. Here, though, "we've tried touch screens in the U.S. before. They haven't worked, but maybe they'll work now," Zander said.

Zander also warned that Motorola's future success isn't about coming up with a new form factor. "There's only so many ways you can cut this thing – there's flip phones and sliders and rotators," he said. Rather, Motorola has to come up with "cool experiences." Motorola was the first to come out with iTunes phones, Zander said.

But Motorola's iTunes phones flopped because of creaky software. That's where Motorola's focus on "silicon and software" will come in, starting with accelerating the company's switch off of the ancient P2K phone platform to three newer platforms: AJAR, a Java-based platform for low-end phones; a Linux/Java platform for the midrange; and Windows Mobile 6 plus Good for smart phones. Sure, they were working on that anyway, but they're speeding it up.

"On Linux/Java, we should be converting much faster," Brown said.

Motorola will also be pricing phones to make a profit, not just to increase market share – which brings up one of the more curious Motorola pricing anomalies of recent months, the question of why Cingular is selling the powerhouse 3G RAZR V3xx for $50 but the relatively awful 2G RAZR V3i for $199.

GSM operators like Cingular are trying to push customers onto 3G networks, to get more "network efficiency," Zander said. That means heavily subsidizing 3G phones to make sure they sell. It also means Motorola producing more, and better, 3G phones than they've been doing.

"I think you'll see more in the second half of the year," Zander said. But "2008 is really when we can explode with a multiplatform design strategy."

Copyright 2007 by Ziff Davis Media, Distributed by United Press International