Motorola’s shareholders already love Sanjay Jha, the company’s new mobile phone division CEO: Shares are up 10.4% today to $9.73. So what’s his plan to turn around Motorola’s troubled gadget business?
Nothing big yet: Three hours into his new job, Jha said on a conference call that his first plans are a 90-day review of the business and hiring deputies to help with areas he’s less familiar with.
As far as Motorola’s mobile phones themselves go, Jha says he might yank some pending projects, but doesn’t expect to make major changes to the roadmap until the second half of next year. Few specifics there, either. He notes that Motorola will need to make up for lost share in the 3G market and work on its distribution network, and that it’ll keep its newish strategy of using chipsets from multiple sources.
What we do know: Jha has a lot riding on Motorola’s success. His base pay — $1.2 million, with a bonus target “not less than” $2.4 million — is nothing to sneeze at. But 95% of his compensation package is equity awards, of which 60% are options that’ll pay out only if Motorola’s stock increases.
12:02 Waiting for call to begin. Note Jha’s salary — no less than $1.2 million, plus $2.4 million bonus and lots of stock — on Motorola’s 8-K.
12:04 Call to begin.
12:05 Co-CEO Greg Brown joins. Annoucing Jha’s appointment. Effective immediately. Greg will continue to lead home and networks mobility, enterprise mobility businesses. Conducted a robust search process, considered a number of candidates. Sanjay “ideal person” to take it to the next level. “Unmatched technical expertise,” strong carrier relationships.
12:07 Sanjay will also help retain and attract talent to help strengthen team. Now have right leader in place.
12:08 Sanjay takes over call. Canned intro: MOT has strong tradition of innovation and design, history… etc. Greg has put solid foundation in place, taken key steps toward enhancing product portfolio. Look forward to building upon changes, solid progress achieved under his leadership.
12:10 Q&A to begin.
12:10 DB: What do you see as near-term tasks in getting division in right direction? Roadmap? Change in strategy? Due diligence: Spent quite a bit of time with Greg, some of the board members. Because of secrecy, wasn’t able to meet with much of leadership team, but have worked with them for years and have always have had a broad perspective, has one of the most talented engineering and business teams. Chipset roadmap: Continue the path that Greg put in place, multi-source chipset strategy. Understand QCOM roadmap, and will work with team to decide which is right way forward. Multi-source is right thing. Perspective is going to launching products quickly and effectively. Need to rationalize how much work we do. First 90 days will make some of those decisions.
12:13 BofA: Perspective on carriers, distributors, to get any feedback on how the channel might think of change? Clue us in on restrictions on Sanjay… anything needs to get done for legal hangups? One call with one carrier this morning. As you could imagine, limited time to reach out to carriers. Feedback so far has been positive, working relationship with all the carriers in U.S., Europe, Asia, so anticipating that will hit the ground running, build on relationship that already exists. Normal confidentiality clauses, some concern about being able to hire people from Qualcomm, and can’t discuss any confidential agreement, but will be very mindful of some of those issues. Heading to Schaumburg later this evening.
12:15 UBS: Assumption that maybe Sanjay wouldn’t lead mobile devices if not properly capitalised. Any colour on capital structure? Plans on relocating to Libertyville? GBrown: As we get more involved in separation analysis, have 250 people working on it, preparing to be able to be in a position where separation could occur in Q3 of next year. Sanjay: Family is based in San Diego, working through practicalities, don’t think I can give you a timeline, intention is to spend vast majority of time in Chicago.
12:17 Merrill analyst: Want to congratulate you on courage! What are weak parts and strong parts? Outside of hardware and semis, what do you think MOT needs to work on? I think the courage required here is less than you think. Clearly we need to make a decision on software platform strategies very, very quickly, and move forward aggressively. Having whole supply chain being as efficient as possibly can. Whole UI design, form factor design, addressing which market going to focus on. Feature phone market? How do we get distribution to be one of the best? One of our competitors has one of the better distribution channel in the world. Marketing and delivering value prop. to consumers.
12:20 MOT different than QCOM. Challenges different than QCOM. Top 2 or 3 things that have to be changed? How do you expect to go about tackling them? First thing we need to do is make sure that through the year we deliver lots of new products to marketplace. Plans for 25% larger number of new products in 2009. All of them based on multi-source chipset strategy. 3G is going to be very important. Market share we have in 3G is below. Plan is to improve that share. As you think a lot of other things, technology is clearly going to be always important, compelling form factors, carrier relationships, distro channel, going to be very focused on that. Make some strategic hires in area I recognise I don’t have experience.
12:22 Are all plans and projects that have been on table going to get reviewed again? I think that as you would recognise that short term things can’t really be affected really dramatically. Between here and middle of next year not much opportunity to significantly impact. Can change, but most likely impact toward second half of 2009 and further out.
12:24 UI across devices? MOT still important to have broad portfolio or narrowing focus on specific types of devices, geographies? Change in 2nd half of 2009 is with respect to product roadmap. In next 90 days will move forward and make changes in other aspects. Coming in with some biases: Bias is that keeping broad product portfolio, geo is right idea. But will evaluate over next 90 days. Open to that possibility, but would be surprised. How long have your talks been on with Motorola? Worked closely with Mot for last 4 years, so have pretty good relationship of processes here. Been discussing this probably since somewhere late June. 20th – 25th of June.
12:27 Call ends.
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