February 4, 2008 / 5:15 AM / 12 years ago

Motorola CEO takes charge of troubled handset unit

NEW YORK, Feb 3 (Reuters) - Motorola Inc MOT.N said its Chief Executive Greg Brown was taking direct control of the company’s loss-making handset business, replacing Stu Reed, in a move aimed at helping speed up the unit’s recovery.

Motorola announced the decision to employees in an internal memo sent on Friday, a day after it announced that it was considering options including a split-off of its mobile unit, which has been losing market share to rivals such as Nokia NOK1V.HE and Samsung Electronics (005930.KS).

Reed, who took over as head of the mobile phone unit last Summer, will stay at Motorola and work closely with Brown, spokeswoman Jennifer Erickson said on Sunday.

Motorola has been criticized for a weak phone line-up and failing to come up with a strong successor to its Razr phone.

The company also faces pressure from activist investor Carl Icahn, who has said he would nominate four directors for Motorola’s board this year. Icahn said in a television interview on Friday that he wanted new management for the mobile division.

Greg Brown took over as CEO in January, replacing Ed Zander.

Motorola on Jan. 23 warned it may lose more market share and post an operating loss this quarter as its cellphone business is taking longer than expected to turn around.

It also backed off its forecast for its mobile devices division to return to profitability in 2008.

Motorola forecast a first-quarter loss per share from continuing operations of 5-7 cents, before restructuring costs. Analysts had expected a profit of 9 cents per share, according to Reuters Estimates. (Reporting by Sinead Carew; Editing by Jan Dahinten)

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