Motorola CEO sees low morale helping revamp

NEW YORK (Reuters) - A disgruntled workforce doesn't usually inspire incoming executives. But that's exactly what motivates Motorola's new CEO.

Almost three months ago, Co-Chief Executive Sanjay Jha was tasked with reviving a cell phone business that has lost ground to Nokia (NOK1V.HE), Samsung Electronics Ltd (005930.KS) and Sony Ericsson.

"People are fed up of not winning," Jha, a former executive of Qualcomm Inc (QCOM.O), the leading wireless chip maker, said in an interview.

But he said employee unhappiness with Motorola's market position would help smooth the way for changes he needs to turn around the business.

"One of the worst things is if you go to a company and things are not well but there's not a sense of crisis. That's not the case here," he said on Thursday. "People understand that changes need to occur and are very open to changes."

Morale may not get any better after the company announced on Thursday that it will cut another 3,000 jobs and plans to scale back its technology and geographic focus. But Jha says these changes are vital to the company's success.

The plan coincided with Motorola's announcement of a phone sales decline that put it fourth place in the global market for cell phones behind Sony Ericsson for the first time. The company already dropped to third place behind Samsung in 2007.

Under Jha's new plan, Motorola will focus on North America, Latin America and parts of Asia such as China, where Motorola believes it has a better chance of succeeding than in Europe.

It will still participate in regions such as Europe where it has been less successful but these will take a back seat.

Motorola also plans to eliminate certain phones it had planned for the first half of next year based on the Symbian UIQ operating system. Instead it will focus on three systems including Android, the mobile system from Google (GOOG.O), and on the Windows Mobile system from Microsoft (MSFT.O).

Jha acknowledged that the strategy means business will get worse before it get better. He expects phone sales to fall again in the current quarter and through the first half of 2009 at the unit, which has been losing ground for two years.

But he said that the move, which was applauded by analysts, was necessary if Motorola wanted to have the right phones to compete better in the future.

"What we lack today is our ability to deliver smart phone devices." said Jha who noted that smart phones -- advanced devices with Web links and computer-like keyboards -- make up one of the strongest growth segments in the market.

Because Motorola's smart phones will have to compete with multiple other manufacturers who use Android and Windows Mobile to power their mobile devices, Jha said the company will look to both hardware and services to differentiate its products.

"I think we could deliver better designs and better products. On top of this we'll deliver services," said Jha, adding that he will focus on phones that are easier to use.

He would not give any details about the services Motorola was planning except to say that they would team up with rather than compete with carrier customers. Its biggest rival Nokia (NOK1V.HE) has also been delving into mobile Web services.

Motorola has been criticized for its dependence since late 2004 on its once-loved Razr phone and follow-on designs inspired by Razr, which came in different shapes and colors.

But Jha told analysts on a conference call earlier in the day that his approach would be different.

"We have been a little too focused on bright shiny objects and not enough on the user experience," he said.

(Editing by Derek Caney)