Motorola Sets Its Phone Unit Free

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Dream Candidate

One possibility among Motorola rivals is Nortel Networks (NT) CEO Mike S. Zafirovski, a former top executive at Motorola and General Electric (GE). Known as Mike Z, he became chief of Nortel after successfully running Motorola's phone business and being promoted to chief operating officer. At Motorola he was considered a turnaround specialist for improving margins in the cell-phone business and speeding up product delivery. He left after losing out to Zander in the competition to replace Galvin in 2004.

Zafirovski could not be reached for comment. A Nortel spokesman said he remains "100% dedicated to Nortel's transformation." Another possibility is Anssi Vanjoki, executive vice-president for new markets at Nokia. Vanjoki is highly respected in the industry as an authority on brand and customer markets—precisely the areas where Motorola is weak. "The one person on the planet who would be the perfect candidate is Vanjoki," says Robert J. Laikin, CEO of Brightpoint (CELL), a major distributor of Motorola and Nokia phones. "But he'd never do it because he'd be considered a traitor in Finland." Vanjoki could not be reached for comment.

Motorola is no stranger to spin-offs. It cut its semiconductor unit loose in 2004 under conditions similar to those of the phone unit now. The new company, Freescale Semiconductor, was considered an underperformer with poor prospects. But Freescale was able to recruit a strong CEO in veteran IBM executive Michel Mayer. Mayer improved the business, and the shares quickly doubled from their initial 13.

Freescale was eventually sold to a group of private equity investors and has fallen on hard times amid the economic downturn. But Brown says the handset business may have similar potential to surprise skeptics—if it attracts the right chief executive. "I think it's a fantastic opportunity to restore and revitalize a proud franchise," says Brown.

Crockett is deputy manager of BusinessWeek's Chicago bureau .