Motorola CEO: "I Love My Job. I Hate My Customers."

A piece in the Wall Street Journal the other day about Motorola’s desperate search for a successor to the Razr reveals a “favorite refrain” of Motorola CEO Ed Zander, “I love my job. I hate my customers.”

Before you go burn Ed in effigy, you should consider that his customers are cellphone companies. They control Ed’s business. He has to go through them to get to you. That irritates Ed.

So you have to ask yourself: Does anyone like cellphone companies? —MEGHANN MARCO

How Motorola Fell A Giant Step Behind [Wall Street Journal]
(Photo: notme2000)

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  1. TPIRman says:

    Is there a full version of the article that isn’t hidden behind a pay-subscriber wall?

  2. TPIRman says:

    Scratch that: Here’s the link.

  3. rekoil says:

    No, that link still only gives me the “free preview”.

  4. rugger_can says:

    Of course he hates his customers. Because the cell phone companies keep on trying to drain the friggen life out of the crappy razor when he (along with the rest of them) are trying to push forward in the market.

    Along with the fact that the Iden network is falling to pieces and they cannot come up with a decent product to integrate Iden to CDMA and sprint keeps pushing the friggen hybrid down their throat because people want data access, and hybrids spell huge losses for them due to the fact they have to start reducing prices for Iden devices.

    Motorola makes some nice phones, but their own models cannot innovate because everyone and their brother wants a razor and cell phone companies keep charging less and less for the damn things making the new (useful) products unappealing.

    Oh well.

  5. rg4vr says:

    So you have to ask yourself: Does anyone like cellphone companies? -MEGHANN MARCO

    NO!!!!

    Wait, HELL NO!!!

  6. Slytherin says:

    I just about lost my sh*t when I read the headline. Then I realized he was talking about the cell phone providers. Glad he’s on our side.

  7. TPIRman says:

    @rekoil: You’re right — WTF? Sorry about that. When I posted the link, it gave me the full version.

    I just found another link to the full version on Google. It worked twice. Then when I clicked on the Google link a third time, it just gave me the summary. That WSJ website is a wily one.

  8. ScramDiggyBooBoo says:

    They better get something to replace the RAZR. They are running out of colors to turn the thing into. I mean c’mon..holy shit batman..a purple RAZR for mothers day, it must have special powers. Come on Moto!!!

  9. matdevdug says:

    I would love a RAZR that didn’t die after 24 hours away from the charging port…..go MOTO go!

  10. Broominator says:

    @ScramDiggyBooBoo: Motorola has several “replacements” to the Razr, but the phone companies just keep marketing the hell out of the Razr and pricing it down so people don’t look at some of the better phones that Moto is offering.

    I’m more of a Sony-Ericsson fan myself–until the iPhone comes out, that is.

  11. Buran says:

    You know, if they’d do a better job of advertising the fact that you can buy unlocked phones straight from phone makers’ websites, they’d make more money from direct-to-user sales.

    Oh, and if they didn’t charge such a huge price difference for the unlocked phones, too.

    My bf just bought an unlocked Razr V3xx from ebay (we like the razr. A lot of people don’t, but we have our reasons) for a lot less than what Motorola would charge for it straight from their site.

    Why do we still go through third parties for so many things that would best be bought straight from the manufacturer?

  12. orielbean says:

    Buran, remember that the cellphone is subsidizing the phone b/c you are getting the contract from them. That’s why it’s only 50 bucks or whatever. I paid about 250.00 for my treo 650 a few years ago off of ebay as well.

    What bugs me most is the deliberate inability of most phones to work across providers, thus forcing a lock-in of sorts on most of us. I wish the gsm phones had better networks; I’d swap from verizon in a second. But all my tmobile, cingular, sprint, and the other carriers all get significantly worse reception, even with the same model phone…

  13. BillyShears says:

    @orielbean: I understand where you’re coming from. I was on Verizon for nearly a decade before mustering up the will to at least see if Cingular could at least match their coverage. Have you checked their coverage locator? It gets pretty close to the ground.

    Anyway, I’ve been pleasantly surprised, and while the phones feature a decent amount of branding, all it takes to bring a Cingular phone over to T-Mobile (or any other GSM carrier) is getting the code from Customer Service (a relatively painless process as long as you’ve had an account in good standing for 90 days).

    It’d take the deal of the century to get me back to Verizon; between more freedom with hardware and rollover minutes, I’d need a very good reason to think about leaving.

  14. wikkit says:

    Whether it’s the fault of the cell phone manufacturer’s, or the service providers, I know not, but I’d love to see Motorola and its ilk put out PHONES.

    Let me list the items that I do not want in my cell phone
    -a camera (I already own one thanks)
    -an internet browser (the rates are ridiculous)
    -polyphonic ringtones (whaaaaaat?)
    -a music player (see note about camera)
    -anything not directly related to making my calling experience better (ie: redundant displays, tricked out paintjobs, impossible button layouts)

    About 9 months ago I read about Motorola bringing out a line of budget phones aimed at long battery life and strong reception
    http://gizmodo.com/gadgets/cellphones/motofone-f3-hands+on
    but they’ve limited the distribution to emerging markets.

    To the cellphone manufacturers I would make the request that those of us over the age of 15 could really do with some market attention.

  15. axiomatic says:

    There is not a single cell phone signal provider that is worth a damn. I’ve jumped from Sprint, to Nextel, to AT&T, to Cingular (who just became AT&T again…) and so far I’m not happy. I can never do what I want. These companies only cater to the masses.

    The dumbest thing I have ever heard of occurs at every one of them. You can’t upgrade your phone when you want too?!?!?

    Right now I have a Cingular 8125. I want an 8525. Right now my account says I can’t get a 8525 for another 6 months, due to some silly contract regulation.

    Look dumbasses, I WANT TO HAND YOU MONEY!!! But you apparently don’t want it.

    Someone explain this to me because if I were a Cingular shareholder, there better be a damn good reason they wont take my money.

    Also the reduced feature ROMs limiting functions on phones is stupid. I realize they don’t want a support nightmare. But damnit, I don’t want support! I’m smarter than the support idiots. I want ALL the features the phone can do.

    So my solution. I upgraded my 8125 ROM to Windows Mobile 6 on my own. Screw Cingular, no money for you!

    In the future I plan to buy from the vendor. In this case HTC. Just give me a SIM card. I’ll do the “heavy lifting” since you cellular companies can’t.

    Worthless… the whole lot of them.

  16. TechnoDestructo says:

    @matdevdug:

    I have a $20 Virgin Mobile Oyster. I can go a week without charging the thing (well, if I’m not talking).

    I’ve not found anything to beat the phone I had in japan in 2000. Some Panasonic CDMA phone. The cheapest AU offered. During the summer it could standby for almost 2 weeks, and had hours of talk time. During the winter it would last a day or two if I wasn’t indoors all the time, and gave me like 3 or 4 minutes to talk. (Really lightweight battery, got cold really easy.)

  17. mac-phisto says:

    maybe if manufacturers started direct-selling to consumers & bypassing cellphone companies his job wouldn’t be so bad. i don’t have the buying power that cingular does, but at the same time you can’t tell me moto is getting $300/razr w/o me calling bullshit.

    imho, this idea of “phone subsidization” is a farce. technodestructo’s $20 oyster proves that. sure, some phones w/ smartphone capabilities are probably in the $400+ range, but have you ever seen a contract provider sell a phone out of contract for under $150?!? sprint’s moto c-290 is very comparable to the oyster & that sells for $150 (& they use the same network!!!!).

    also, i remember watching a super bowl ~5 years ago & seeing a moto commercial w/ a guy wearing sunglasses that displayed stock tickers, etc in a virtual-hud as well as being a phone. where the f- is that technology? they told me it’s coming…

  18. er6037 says:

    @axiomatic:

    You are free to pay retail price for a new 8525 and not renew your agreement. But since you probably don’t want to spend $600 for a phone then you have to sign a new agreement. The agreement requires you to complete a certain amount of time on your contract before they will let you renew your contract and get another discount.

    I really don’t see why this is so hard for people to understand. It really comes down to a lack of education. For over a decade the standard policy amongst ALL national carriers is to offer a significant discount on the handset for signing a two year agreement. If you don’t want sign a contract then you will pay full retail price for a phone…this all seems pretty straightforward and fair to me yet I always hear people on these boards complaining about it. You have a choice in whether or not you sign an agreement.

    Some of you people act like Cingular, Sprint, T-Mobile etc… holds a gun to your head and makes you sign a contract.

  19. BillyShears says:

    @er6037: Fair point; some people think that they need to renew a contract the moment an old one expires. However, these companies really, REALLY need to be more upfront about the fact that you can get a 1-year agreement just as easily as a 2-year. The only difference is that about $50 is tacked onto the price of the phone.

    (And don’t get me started on quirky CA law that forces you to pay tax on the full price of the phone, not the subsidized price. Oy.)

  20. TSS says:

    He should worry a little less about his customers and a little more about Carl Icahn trying to get a seat on the board.

  21. er6037 says:

    @BillyShears

    Well, The fact of the matter is what needs to be made clear is the fact that the phone you are buying is being sold to you at a subsidized price. I think a lot of people really believe that the price of the phone is $20 when they buy it. Regardless, people would realize that the 2 year contract system is a great thing once you take it away and everyone is paying $200-$700 for a phone.

  22. kdkirsch says:

    I think there is a key point that remains unsaid: cell phone prices in the current environment are artificially set (as opposed to set by a free market). Let me explain what I mean by the “current environment” (this repeats a good bit of what has already been stated). Cell providers (e.g., Cingular, Verizon, etc.) have primarily two prices for a given phone: with a new 2-year contract or without. With a new contract, the phone is usually sold at a discount. Why? So you sign a contract. They do not want to sell phones without a contract. Afterall, their business is providing cell service, not cell phones. The goal of this pricing scheme is to get you into a contract.

    So where does that bring us, and where is my key point? The price of phones sold without a contract is actually higher than the market price. Doing this presumably leaves the consumer with no choice but to sign a contract. That’s what I mean by an artificial price. For most phones the providers behave as monopolists resulting in higher prices and less supply–this is the reason for exclusive agreements for certain phones.

    E.g. the Motorola RAZR. When it first came out it was priced very high (I recall $300). Since Cingular had an exclusive, i.e. a monopoly on the RAZR market, they could charge that and still sell them like hotcakes. Once that exclusive expired, competition brought the price down.

    Herein lies the insanity of the cell phone industry and market. While exclusives are never good for consumers (and that is OUR first concern), they are seldom good for the manufacturers (yes, they are paid for the exclusive agreement, but if it were good in the long term the Moto would not be losing money and their CEO wouldn’t be complaining about it).

    So the main point: the retail price (i.e. sold without a new contract) is fixed above the market price to encourage contract sales instead of hardware sales. If the manufacturers were to sell unlocked phones directly to consumers this problem would be largely solved. (The rest of the problem lies in the fact that the U.S. cell networks are not all the same standard. If they were consumers would be much better off. Further analysis I’ll leave for a later time.)

  23. MrFlashport says:

    As long as the providers restrict unlocked handsets from accessing their networks, we are forced to buying crippled, neutered garbage and handcuffed into multi-year contracts for it. Think you can get a groovy Korean CDMA phone on Verizon or Sprint? Sorry because the ESN isn’t in their database, and the phone doesn’t have their craptacular buggy firmware on it, your SOL.

    Even the US GSM carriers are going this route. Good luck getting an unsigned Java applet to run on your T-Mobile branded phone. Not gonna happen without modding the handset.

    still gets me if you pay FULL RETAIL PRICE for a phone from a US Carrier shouldn’t it be unlocked and unbranded? Newsflash…you buy SERVICE from them and the devices they provide are locked into that service. Even unlocking a Cingular phone won’t make it 100 percent compatible with T-Mobile because of customized firmware.

    Maybe if the FCC wasn’t so bought and paid for and set a standard for wireless telephony years ago, buying a cellphone would be as easy (and cheap) as buying a phone for your landline.

  24. Elvisisdead says:

    I was a beta tester for Moto for a while. They have some really killer phones in the works and some that are really great, but not released in the US.

    I mirror Buran’s statements. Moto needs to market direct to consumer unlocked phones at a very slim markup. However, I would almost guarantee that it’s in their contract with the carriers that they won’t do this. That’s why you can get them from 3rd party wholesalers off eBay much cheaper than direct. It doesn’t have much to do with carrier subsidy.

    Most American consumers are most likely not interested in buying an unlocked phone. They’ll just wait out the upgrade period on their contract with the carrier and then take whatever phone that they can get for free or cheap.

    If they could market something that would store my contacts, just make calls, and be really small with bluetooth, I’d be all over it. I don’t need text, internet, a camera, ringtones, etc.

  25. lsallen says:

    Get back to basics. If you have to wake up in the morning and go to a job where you hate your customers, you need to find a new job. Doesn’t matter if your customers are all jerks or not. It just does not work right if you cannot focus in some way on delighting the sorry bastards.

    Let us remember the context of the comment: how Motorola lost its top spot in the cell phone market. Put that fact next to the “hate customers” comment, season with the independently significant fact that he was willing to say it out loud publicly, and what do you think is the probability that “customer-hating” is no factor at all in the disfunctional state of the US cellphone market?

    Zander, you are supposed to earn the big bucks by conceiving and executing on a creative win-win-win. So go do your cookin’ or get out of the kitchen.