Motorola Inc., the world's No. 2 cell-phone maker, will name former Sun Microsystems Inc. President Edward Zander as its chief executive, a source close to the situation said on Monday.

The announcement will end the era of Chairman and CEO Christopher Galvin, whose grandfather founded the Schaumburg, Illinois-based company. It could come as early as Tuesday, the source, who asked not to be identified, told Reuters.

Motorola Inc., the world's No. 2 cell phone maker, will name former Sun Microsystems president Edward Zander as its chief executive officer, a source close to the situation said on Dec. 15, 2003. Motorola's headquarters in Schaumburg, Illinois is seen in this undated file photo. [Reuters]

Motorola officials declined to comment, other than to say a new CEO would be named before the end of the year. Other sources earlier told Reuters the search had been narrowed to two candidates, Motorola President Mike Zafirovski and an outside candidate many analysts believed was Zander, who now works at Silver Lake Partners, a private equity firm that specializes in technology.

Zander, 56, could not be reached Monday, but previously declined to comment on Motorola's search. He was at Sun for 15 years, but left last year after it became clear he would not become CEO any time soon.

"This is a coup," said J.P. Morgan analyst Ehud Gelblum, who has an "overweight" rating on Motorola's stock and does not own shares. "This is definitely a big-name person. It's very positive for them."

With Motorola struggling with delivery problems of some wireless phones, Wall Street sees the decision of who will replace Galvin as crucial to the company's growth prospects.

Galvin, citing strategic disagreements with the board, said in September he would resign as soon as a replacement was named. He has been CEO since January 1997 and chairman since June 1999.

Motorola shares closed off 2.22 percent at $12.79 on Monday on the New York Stock Exchange.

TOUGH DECISIONS AHEAD

The new CEO must decide quickly on which businesses Motorola should focus, analysts have said. The month after Galvin's exit announcement, Motorola revealed plans to spin off the semiconductor unit, a move many analysts and investors had long wanted.

As Motorola struggled with the slowdown in telecom spending over the past few years, investors questioned Galvin's ability to make the necessary hard choices.

Motorola's cell-phone business, its largest unit, has had some success with a return to profitability and the debut of some highly touted models.

However, the unit has struggled with delays in deliveries of hot-selling models and faces stiff competition from hard-charging South Korean rivals Samsung Electronics Co. Ltd. (005930.KS) and LG Electronics Ltd. (066570.KS), as well as its larger Finnish competitor, Nokia.

"I guess they decided they didn't want Mike Z," said Shawn Campbell, principal with Campbell Asset Management, which owns both Motorola preferred and common stock.

He declined to comment about the search in a Sunday e-mail to Reuters, but said a decision would be announced "well before the end of this year."

Some investors pushed for an outsider with fresh ideas, untainted by a company past that saw Motorola lose its cell- phone leadership to Nokia.

Others argued Zafirovski has a strong track record and qualifies as an outsider because he arrived at Motorola only three years ago, from General Electric Co.

Close

Today's Top News		Top International News
+Terror list with links to al-Qaeda unveiled ( 2003-12-16) +Bush vows fair, public trial for Saddam ( 2003-12-16) +Official: No flu outbreak reported ( 2003-12-16) +More citizens win cases against government ( 2003-12-16) +Workplace safety scrutinized ( 2003-12-16)		+Motorola to name Zander CEO ( 2003-12-16) +Bush vows fair, public trial for Saddam ( 2003-12-16) +Iraq council member says Saddam 'broken,' 'ruined' ( 2003-12-16) +Iran wants Saddam tried for Iran-Iraq war ( 2003-12-16) +Saddam denies regime had banned weapons ( 2003-12-16)