My first cell phone was made by Motorola. It will probably be my last.
The dilemma Motorola faces is that my experience is multiplied over and over, to the point where (rightly or not) millions of people just don't believe the company's still on the hip edge of technology. That may not reflect the entire story--I'm sure Motorola's got cool stuff in the labs--but perceptions matter even when they're not always true. Motorola has a history of . And right now, it's suffering through one helluva dry spell.
So it was that in the same week Motorola suffered the further indignity of receiving a bargain-basement buyout offer for its phone unit from a Indian consumer electronics company, Research In Motion reported killer earnings. Next to Apple and its iPhone, RIM remains the most innovative company in the smartphone business.
Nothing you can do about the earnings calendar and buyout bids are random. But the dearth of interesting product news out of Motorola at the CTIA wireless show this week underscores its current plight. This show is the place for the world make a fuss over your latest mobile toys but there was Motorola with very little to show.
Instead, the company decided to head to Las Vegas to talk up other aspects of the business. Of course, without any new products in tow, they couldn't really offer much insight other than banalities about the Cubs' chances to break the jinx. (I should give them a nod for having a good broadband infrastructure business. And Motorola remains No. 1 in cable set tops, too. Those are healthy businesses. Unfortunately, it's the flashier, sexier handset business that is screwed and screwed up bad.)
Meanwhile, RIM hit the ball out of the park with its earnings posted Wednesday afternoon. (Hey, the baseball season just started, so humor me.)
The sad irony is that Motorola was considered a hot brand not so long ago. I know it's fashionable to blame Motorola's current troubles on Ed Zander, the former CEO hired away from Sun Microsystems where he served as president under Scott McNealy. But if you compare Motorola to RIM--and yes, I know this is an inexact comparison--the discussion boils down to the difference between a pre-smartphone-era company versus a hipper outfit with real smarts about smartphones. Thursday marks the 35th anniversary of the day a Motorola exec made what is believed to be the first public call using a cell phone.
Zander enjoyed temporary success after he arrived. But the culture was set in stone by the Galvins, who essentially turned Motorola into a quasi-family business. The Galvin brothers, Paul and Joseph, founded the company in 1928 and the Galvin family continued to hold top management positions until 2003. Unfortunately for Motorola, management talent doesn't always get handed down with the genes. To be sure, it worked at IBM, where Tom Watson Jr. built an even bigger powerhouse after taking over from his father in 1956. His father had led the company since 1914. But by the time the Watson fils retired in 1971, IBM really was Big Blue.
But that was probably the exception to the rule. Bill Ford parachuted in at his great-grandfather's company in 2001, but was powerless to halt its decline. Toyota overtook the company as the world's second biggest automaker (behind General Motors) and the company stopped making great cars. Even worse, Ford became ever-more addicted to gas-guzzling SUVs and pick-up trucks.
Now the plan is to break up Motorola into two separate, publicly-traded companies, one focused on handsets and accessories, the other charged with wireless broadband networks and enterprise-level communications services.
That's what happens when you put the MBAs in charge. I don't know if it will work but if Motorola wants to win back former customers, the more pressing need is to get cool new technology into peoples' hands--and fast.