Motorola Inc. is expected to announce as early as Tuesday morning that its new chief executive will be former Sun Microsystems Inc. President and Chief Operating Officer Edward Zander, according to sources close to the company.
The cell phone maker’s board selected Zander, 56, over Motorola’s president and chief operating officer, Mike Zafirovski, 50, in recent days after a wide-ranging, three-month search, the sources said.
Zander, a technology industry veteran, will bring marketing savvy and a reputation for hitting his numbers while he was at Sun, where he spent 15 years. He retired last year when it became clear that his advancement to the top spot was blocked by Sun CEO Scott McNealy.
“He’s an interesting choice,” said Morningstar analyst Todd Bernier. “He’s a bit of a legend in the tech industry. He’s definitely a big thinker. He certainly knows technology.”
Zander is a managing director at Menlo Park, Calif.-based private equity firm Silver Lake Partners, known for providing large cash infusions to restructure established tech firms.
His experience at Silver Lake will come in handy at Motorola, a chronic underperformer that is spinning off its semiconductor operation, a business that last year generated sales of $4.8 billion, or 18 percent of Motorola’s $26 billion in sales.
He also will need to fix chronic problems in Motorola’s biggest business: cell phones. The company repeatedly has stumbled in anticipating trends and meeting deadlines to deliver new models to customers. Most recently, it ran short of components to meet the surge in holiday orders for its new camera phones.
“Zander is a choice people would love to see,” said a Wall Street analyst who asked not to be named.
But in picking an outsider, Motorola’s board risks losing Zafirovski, who made no secret of his desire for the job. The 6-foot-4-inch executive was recruited to Motorola in June 2000 from General Electric Co. to head the cell phone business, and he was credited with making the division profitable quicker than anticipated.
He was tapped to succeed Edward Breen as president and chief operating officer in July 2002, when the latter jumped ship to run Tyco International Ltd.
As recently as early December, Zafirovski was making the rounds of institutional investors, who concluded he was still in the running. When asked by a large investor whether he would stay at Motorola if the board recruited someone from the outside, he joked that he would have “no trouble at all working for Jack Welch,” according to an investment banking source.
He was the favorite choice of managers in Motorola’s cell phone business, where he inspired intense loyalty.
“If they pick Zander over Zafirovski, they’re going to have to give Zafirovski some sweetener” to stay, said another Wall Street analyst, who asked not to be named.
“Mike’s an ambitious guy,” said a source who knows Zafirovski. “He wanted it. And he certainly had a lot of people who thought he was quite good.
“So it really has to come down to the board saying Ed is at least a head taller than Mike. And Mike would have to see it that way as well and feel that he could learn something from this guy” in order to stay.
Zander’s name surfaced early in the search, around the same time in October that Motorola’s board also talked to Qwest Communications International Inc. CEO Richard Notebaert, an executive with strong ties to Chicago.
The board launched the search in September, after Chairman and CEO Christopher Galvin decided to retire, citing differences with the board over strategy and the pace of Motorola’s turnaournd.
Zander, a director of Seagate Technology and Portal Software Inc., has a long history in the tech business. In the 1980s he was a senior marketer at computer makers Apollo Computer Systems and Data General.
At Sun, while president of its software group, he initiated the development of Solaris, a computer operating system. He was named president in 1999.
An engineering graduate of Rensselaer Polytechnic Institute in Troy, N.Y., he holds an MBA from Boston University. His training should stand him in good stead at Motorola, a company historically dominated by engineers.
