Libertyville, Illinois: Sanjay Jha’s honeymoon as co-chief executive at Motorola Inc. lasted just a few minutes into his first meeting with employees in 2008.
“Why should we trust you?” one employee blurted. The frustration was understandable. Motorola, which pioneered cellphones and built such consumer favourites as the StarTac and the Razr, had not had a hit phone in years, and a succession of leaders could not find one.
Jha, 46, an engineer who worked his way up at Qualcomm Inc. from a chip designer to the No. 3 executive, answered the challenge, saying employees should not take him on faith but watch what he did.
Crucial milestone: Motorola Inc co-chief executive officer Sanjay Jha. Motorola’s Droid is the first phone to use the latest release of Google’s mobile operating system Android, dubbed Eclair. Ryan Anson / Bloomberg
Jha knew he had to act fast to slash costs and prune dozens of phones that were based on dead-end technology that simply were not profitable. That made the last several months of 2008 a financial disaster—losses doubled as sales fell by one-third.
“If I didn’t have smart phones in the market for Christmas of ’09, this business wouldn’t have a runway,” he said.
Jha does not have Motorola flying again, but he at least has it poised for a takeoff. On Wednesday, Verizon Wireless introduced Motorola’s new Droid smart phone, which is nearly as thin as an iPhone but with a bigger screen and a slide-out keyboard. T-Mobile has started selling another Motorola smart phone called the Cliq.
“Motorola is a different place than it was a year ago,” said Paul E. Cole, T-Mobile’s vice-president for product development. “Sanjay has done a spectacular job.”
Looking back, Jha said that Motorola was in worse shape than he knew when he took the job, largely because of a dysfunctional management culture that missed the shift in consumer preferences from phones designed primarily for talking to those that do nearly everything a computer can do. The firm’s engineering talent, which had once developed great phones, remained intact, he said.
As luck would have it, one of those engineers, Rick Osterloh, grabbed Jha just as he stepped off the stage at that first town meeting in August 2008. Jha had mentioned Google’s Android operating system for smart phones. Osterloh rushed the stage to tell him he was working on an Android phone in Motorola’s Silicon Valley outpost that would bring together text messages, email and social-network updates.
By the end of that week, Osterloh was sitting on the corporate jet, flying with Jha back to California and explaining the Android concept in detail.
“He was able to understand what we were doing at such a detailed level. I was very impressed,” Osterloh said.
In the weeks after, as Jha scrutinized Motorola’s other product groups, he found that the group making phones with Nokia’s Symbian operating system was staffed almost entirely by outside contractors. The entire project appeared to lack coordination and it was constantly months late in delivering phones. Even worse, Motorola was not making money on its Symbian phones.
Jha soon decided to axe the entire Symbian product line as well as phones using several other operating systems. He wanted to simplify product development to standardize on one or two core systems. It came down to a Microsoft Windows mobile operating system and Android. When Microsoft said that a crucial release of its mobile operating system would be delayed, Jha gave Microsoft the stiff arm and bet on Android.
At the same time, Jha had to pick which microprocessors and radio chips would be at the core of its new line. He chose a custom design Motorola had been developing with Texas Instruments Inc.
In the fall of 2008, Jha received an email from Verizon, asking for ideas for a “long ball play for the fourth quarter” of 2009, Jha recalls. That meant a smart phone that could take on the iPhone. He flew to the carrier’s headquarters in Basking Ridge, New Jersey, bringing with him models of several of the company’s latest designs. Verizon executives seemed partial to one thin, angular handset that had been designed in London. Even without a firm order, Jha immediately assigned Iqbal Arshad, who had been the project manager for the Verizon version of the Razr, to transform the mockup into a smart phone Verizon could sell a year later.
“Sanjay said, ‘Burn the ships and focus on Android,’” Arshad recalled. That meant rearranging the existing, tightly packed interior to accommodate the larger chips needed to connect to Verizon’s network.
They found a way to fit a slide-out keyboard into a phone that was only 1.5mm thicker than the iPhone. And they used a 3.7 inch touchscreen, noticeably bigger than the 3.5 inch screen on the iPhone. To take advantage of the higher resolution of that screen, Motorola, working with Google, developed new software that would support high-definition video and 3D graphics.
Motorola’s Droid is the first phone to use the latest release of Android, dubbed Eclair, which features free turn-by-turn directions from Google and sophisticated speech recognition.
Verizon worried that the angular design of what was to be the Droid appealed more to men than women. Motorola quickly rounded some of the phone’s edges and added a rubberized backing to create a softer feel.
By March, T-Mobile had placed a firm order for the social-networking phone that it would name the Cliq. But Verizon was still sceptical, remembering many times in the past when Motorola had missed important deadlines. So Jha hand-delivered a working prototype to Lowell C. McAdam, the chief executive of Verizon Wireless. A few weeks later, emails started arriving with purchase orders from Verizon for what it decided to call the Droid.
Jha was back on stage Wednesday morning, this time at a news conference to formally introduce the Droid, which will go on sale next week for $199 (Rs9,452).
Analysts in the audience said that the Droid, which will be backed by the biggest ad campaign by Verizon Wireless, is a crucial milestone in Motorola’s recovery.
©2009/The New York Times