Motorola CEO is ready to take on iPhone

Motorola Chairman and CEO Ed Zander says his company is ready for competition from Apple's iPhone, due out next month.

"How do you deal with that?" Zander was asked at the Software 2007 conference Wednesday in Santa Clara, California. Zander quickly retorted, "How do they deal with us?" He was onstage with M.R. Rangaswami of Sand Hill Group, who asked the CEO questions after Zander spoke.

Motorola has slipped financially as it has yet to develop a hit successor to its popular Razr mobile phone. Motorola reported a first quarter net loss of $181 million, compared to a profit of $686 million in the year ago quarter. Motorola reported a 2 percent decline in first quarter overall revenue but a 15 percent decline in its mobile devices segment, which accounts for 57 percent of its total sales.

But the iPhone, which will go on sale for $499 or $599, depending on the memory capacity, will stimulate the overall market for feature-rich mobile devices, including Motorola's, said Zander.

"I think it's going to, in some cases, reinforce what we have been trying to do and are doing with the mobile Internet. Applications like multimedia and video and photos and music are going to be done on these devices," he said.

Motorola is planning to introduce a high-end mobile phone next week in Europe that meets one of the company's product development goals to offer "wickedly cool" products, Zander said.

"This has unbelievable video capability. It's a media monster," he said of the new Motorola product, adding that it will be able to play movies stored on an SD (Secure Digital) card. He declined to provide other details.

While hit consumer products are a priority, so is pursuing the enterprise mobility market, which accounts for about 32 percent of sales. Zander cited Motorola's acquisitions of Good Technology and Symbol Technologies, both completed in the first quarter, as key to its enterprise strategy. He also displayed the Motorola MC 35 Enterprise Digital Assistant, based on Symbol enterprise mobility technology, and a Motorola Q model featuring Good's e-mail software, both targeted at mobile workers.

Industry figures forecast that by 2009, 70 percent of workers will need wireless connectivity to do their jobs, Zander said.

The future of computing is on mobile, connected devices rather than on traditional desktop PCs, Zander said. In some developing countries, computing is offered only on wireless networks because there are no copper wire telephone networks.