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Motorola’s Brown to create his own luck

Motorola’s Brown to create his own luck
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First Published: Sun, Dec 02 2007. 11 52 PM IST

Task at hand: Motorola chief executive-elect Greg Brown.
Task at hand: Motorola chief executive-elect Greg Brown.
Updated: Sun, Dec 02 2007. 11 52 PM IST
Motorola Inc.’s top post may look like a poisoned chalice. Sales at the cellphone and tech group are falling, its handsets look tired, big stakeholder Carl Icahn is hovering, and new competitors such as Apple Inc. and Google Inc. threaten. So it’s easy to imagine chief executive-elect Greg Brown will soon be staggering from predictable crises to unforeseen ones. But that may not happen.
Task at hand: Motorola chief executive-elect Greg Brown.
Brown, who is currently chief operating officer at the Chicago-based cellphone and technology group, has the luxury of low expectations. Motorola’s problem is that its phones have lost their fashionable edge. And the travails of rival Nokia have shown that handset companies can regain their panache, but it doesn’t happen quickly. Of course, Icahn isn’t known for delaying his financial gratification. But his failed proxy fight this year partially defanged him. Investors didn’t back his idea of returning cash to shareholders. They sided with chief executive Edward J. Zander, who was unpopular even then. Zander will step down as Motorola’s chief executive on 1 January. His replacement will be Brown. Investors will probably grant Brown time to unveil his plans and a period for them to pan out.
Icahn’s effort points to another factor in Brown’s favour. Motorola’s balance sheet has more than $4 billion (about Rs15,880 crore) of net cash going into the holiday season—usually the most profitable part of the year for electronics companies. This hoard gives him time. And time may be important. Motorola has a long history of surprise hits. For example, Zander was the beneficiary of the hit handset Razr, which was rolled out just after his ascension. The magnitude of the Razr’s success made Zander temporarily look like a genius. Brown probably can’t count on such a break. But he may have enough of a grace period to create his own luck.
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First Published: Sun, Dec 02 2007. 11 52 PM IST