New chief delivers on Motorola phone

LIBERTYVILLE, Ill. — Sanjay Jha's honeymoon as co-chief executive of Motorola lasted just a few minutes into his first meeting with employees in 2008.

"Why should we trust you?" one employee blurted. The frustration was understandable. Motorola, which pioneered cellphones and built such consumer favorites as the StarTac and the Razr, had not had a hit phone in years, and a succession of leaders could not find one.

Jha, 46, an engineer who worked his way up at Qualcomm from a chip designer to the No. 3 executive, answered the challenge, saying employees should not take him on faith but watch what he did.

Jha recalled in a recent interview that he had hoped, at a minimum, his talk "gave the team general comfort I wasn't a huckster."

He knew he had to act fast to slash costs and prune dozens of phones based on dead-end technology that were not profitable. That made the last several months of 2008 a financial disaster — losses doubled as sales fell by a third.

Jha also knew he had only a year to deliver new handsets that could go head to head with Apple's iPhone if he had any hope of retaining the trust of Motorola's employees, investors and customers — not to mention its board, which had lured him with an enormous grant of stock and options.

"If I didn't have smartphones in the market for Christmas of '09, this business wouldn't have a runway," he said.

Jha does not have Motorola flying again, but he at least has it poised for a takeoff. Last week, Verizon Wireless introduced Motorola's new Droid smartphone, which is nearly as thin as an iPhone but with a bigger screen and a slide-out keyboard.

Bellevue-based T-Mobile USA has started selling another Motorola smartphone, the Cliq.

"Motorola is a different place than it was a year ago," said Paul E. Cole, T-Mobile's vice president for product development. "Sanjay has done a spectacular job."

Bad shape

Looking back, Jha said Motorola was in worse shape than he knew when he took the job, largely because of a dysfunctional management culture that missed the shift in consumer preferences from phones designed primarily for talking to those that do nearly everything a computer can do.

The company's engineering talent, which had once developed great phones, remained intact, he said.

As luck would have it, one of those engineers, Rick Osterloh, grabbed Jha just as he stepped off the stage at that first town meeting in August 2008.

Jha had mentioned Google's Android operating system for smartphones. Osterloh said he was working on an Android phone in Motorola's Silicon Valley outpost that would bring together text messages, e-mail and social-network updates.

By the end of that week, Osterloh was sitting on the corporate jet, flying with Jha back to California and explaining the Android concept in detail.

Show and tell

A few days later, the top dozen members of Osterloh's group assembled in a conference in Motorola's office in Sunnyvale, Calif., to review the work done so far.

The four-hour meeting was scheduled for 6 p.m., a shock for Motorola's 9-to-5 culture. And Jha had not only asked for the PowerPoint presentation in advance, he had read all 100 slides and asked such detailed questions that the presenters had had to produce 20 more slides.

"He was able to understand what we were doing at such a detailed level. I was very impressed," Osterloh said.

Jha was just as impressed with Osterloh's unit. "Very quickly, I figured out they knew how to write software," Jha said. "It felt like a team that would execute."

In the weeks after, as Jha scrutinized Motorola's other product groups, he often had the opposite reaction. He discovered the group making phones with Nokia's Symbian operating system was staffed almost entirely by outside contractors.

Jha soon decided to ax the Symbian product line, as well as phones using several other operating systems. He wanted to simplify product development to standardize on one or two core systems. It came down to a Microsoft Windows mobile-operating system and Android. When Microsoft said a crucial release of its mobile-operating system would be delayed, Jha bet on Android.

At the same time, Jha had to pick which microprocessors and radio chips would be at the core of its new line. This forced him to choose between chips made by the division he had run at Qualcomm and a custom design Motorola had been developing with Texas Instruments.

"This was very hard for me," Jha said. He spurned his former employer.

In the fall of 2008, Jha received an e-mail from Verizon Wireless, asking for ideas for a "long ball play for the fourth quarter" of 2009, Jha recalls. That meant a smartphone that could take on the iPhone.

He flew to the carrier's headquarters in Basking Ridge, N.J., bringing with him models of several of the company's latest designs.

One stood out

Verizon executives seemed partial to one thin, angular handset. Jha immediately assigned Iqbal Arshad, who had been the project manager for the Verizon version of the Razr, to transform the mock-up into a smartphone Verizon could sell a year later.

"Sanjay said, 'Burn the ships and focus on Android,' " Arshad recalled. That meant rearranging the existing, tightly packed interior to accommodate the larger chips needed to connect to Verizon's network.

Meanwhile, the phone's overall design needed to be exciting enough to go head-to-head with the iPhone.

Motorola's Droid is the first phone to use the latest release of Android, dubbed Eclair, which features free turn-by-turn directions from Google and sophisticated speech recognition.

The biggest problem was the balance between design, which was once a Motorola hallmark, and the phone's performance.

Even a small change, like the color of the paint, means that the design of the several radio antennas embedded into the phone's case have to be rearranged.

Tweaked for women

Verizon worried that the angular design of what was to be the Droid appealed more to men than women. Motorola quickly rounded some of the phone's edges and added a rubberized backing to create a softer feel.

By March, T-Mobile had placed a firm order for the social-networking phone it would name the Cliq.

But Verizon was still skeptical, remembering many times in the past when Motorola had missed important deadlines.

So Jha hand-delivered a working prototype to Verizon Wireless CEO Lowell McAdam. A few weeks later, e-mails started arriving with purchase orders from Verizon for what it decided to call the Droid.

Jha was back on stage last week, at a news conference to formally introduce the Droid, which is going on sale this week for $199.