Motorola's Jha says Carl Icahn has been a 'force for good'

Motorola Inc. co-Chief Executive Officer Sanjay Jha said billionaire investor Carl Icahn, who pressured the company into a planned spinoff of its handset business, has been "a force for good."

"Carl is seen as an agitator, but in this instance I think he's agitated in the right ways," Jha said today in an interview at Bloomberg's headquarters in New York. "He's pushed for us to think about our business in the right way from a balance sheet point of view, from a focus on businesses point of view."

Following demands from Icahn, Motorola agreed to change its structure in 2008 to try and reverse the performance of its ailing handset business. Jha, who was brought in from chipmaker Qualcomm Inc. to revive phone sales, is rebuilding that business by focusing on a smaller range of more profitable smartphones that use Google Inc.'s Android platform.

Icahn, who built his fortune by investing in companies and pressuring management into selling at higher share prices, said in a regulatory filing on May 7 that he had lifted his stake in Motorola to 8.75 percent from 5.15 percent at the end of 2009.

"The board has acted extremely responsibly in bringing Sanjay on board and also in splitting up the company, both of which are very positive steps," Icahn, 74, said in an interview today. "We're extremely happy with what's been happening. I believe the company is undervalued."

Jha, 47, is chasing Apple Inc. and Research In Motion Ltd. for a larger share of the smartphone market after Apple's iPhone and RIM's BlackBerry overtook Motorola handsets in global unit sales last quarter, according to researcher ISuppli Corp.

Smartphones allow users to surf the Web, play videos and send e-mail. Their sales are outpacing the market for basic phones, used mainly for calls and text messages that were Motorola's traditional strength.

Motorola, based in Schaumburg, fell 3 cents to $7.17 at 11:41 a.m. in New York Stock Exchange composite trading. Before today, the stock had declined 7.2 percent this year after climbing 75 percent last year.

Asked to assess his own performance in his almost two years at Motorola, Jha said: "I would give myself a B to B plus."

"There's a lot of work to be done," he said. "What we have done fundamentally is transitioned ourselves from a voice- centric company, a feature-phone centric company, to a smartphone-centric company."