Reuters reports that rumors of Motorola Inc. (NYSE: MOT) CEO Ed Zander's imminent departure are driving up Motorola stock 3% in mid-afternoon trade.

Carl Icahn, the corporate raider -- now known as "activist investor" -- has been complaining for months about Motorola's weak cell phone sales. And Icahn has been pinning the blame on Zander.

Now another activist shareholder, Eric Jackson, who published a statement online entitled "Motorola Plan B" this week, has added to the pressure on Zander. But Jackson has the support of a mere $1 million worth of shareholders -- Motorola's market capitalization dwarfs that -- at $41 billion.

Motorola, whose shares have lost about a third of their value since mid-October on disappointing results, posted a first-quarter loss due to weak handset sales caused by a lack of advanced phones and tough price competition.

In this case, I don't know if a new CEO would make much of a difference to shareholders. But if Zander leaves, Motorola will need a new one -- and fast.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Motorola.

Once it was clear to Motorola Inc. (NYSE: MOT) that its handset business was falling apart, the company said that it would cut 3,500 of its 66,000 employees. That was in January.

Today the company said another 4,000 would have to go, and that the move would save about $600 million annually. The announcement adds to a fairly stunning set of reversals for the company that was riding high on the sales of its RAZR phones in 2005 and early 2006. The stock ran like a scalded dog from $17 two years ago to over $26 in October of last year.

Then, it became apparent that the RAZR had no legs. Competitors including Nokia Corp. (NYSE: NOK), and Sony-Ericsson were coming to market with more attractive products. These companies were also building cheaper phones that were well-suited to markets like India and China. Motorola had put too much of its bet on one model. By early May, the shares were back to $17.

Outside investors found some hope in Carl Icahn's purchase of shares and attempt to get onto the Motorola board. But, CEO Ed Zander cursed Icahn like a sailor and got enough shareholders behind him to keep Icahn out of the company. Zander did not even have the guts to be quoted in the company's PR about the layoffs. It was left to the COO and CFO to shoulder that.

Firing people may help the stock price for a day or two, and it may cut costs. But, until Motorola can show sales figures indicating that it has models to get back the market share it has lost, getting investors into the stock is going to be very tough.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Motorola, Inc. (NYSE: MOT) rolled out some new handsets yesterday, as the cellphone manufacturer seeks to regain some of the magic that its iconic RAZR handset generated in 2004. Up front and center is the new RAZR 2 handset, which is the sequel to the RAZR, the best-selling wireless handset of all time. It will be carrying quite a bit of weight on its shoulders when released this summer. Can it rescue Motorola?

The original Motorola RAZR sold 50 million units in a staggeringly short period of time -- although half of that time the phone was being given away for free with long-term wireless contracts. as the phone grew old and plunged down the product lifecycle slide. Initially, the RAZR was priced at nearly $500 with a wireless contract, and surely the RAZR 2 will start there as well. But while the older RAZR re-defined the cellphone industry in terms of chic and style, the sequel may not have that panache, although it is loaded with futuristic features while being even slimmer than its predecessor. Is that enough?

Motorola needs another winner to get its house in order and sell as many higher-price handsets as it can to return to consistent profitability. Trying to get customers to shell out another $500 for the sequel to the most successful cellphone ever is not going to be easy, but it's something Motorola must do. If it fails (and we're standing here next year at this time with just a few RAZR 2 sales), Motorola CEO Ed Zander may need to put his resume on Monster.com (NASDAQ: MNST), even if Carl Icahn can no longer lobby for his dismissal.

Although Motorola, Inc. (NYSE: MOT) CEO Ed Zander has won a bit of time to try and turn around the fortunes of the company he leads, there is still much work to do. Billionaire financier Carl Icahn has apparently lost his bid for a Motorola board seat, and the pressure in Zander has eased a bit as a result. But Motorola still needs to get back in the wireless handset game after seeing rivals storm its gates in the last 18 months. So 2007 will be a tell-all year.

Even so, I'm not so sure I share Zander's prediction that many PC-like applications will soon port over to the cellphone, though. It's true that some web browsing and email are things I currently perform on my cellphone, but customer relationship management and forecasting software? On cellphones? I think modern wireless handsets will need a power boost and much better batteries before we even get close.

Motorola is apparently betting some of its future on this scenario, but some massive technological breakthroughs will need to happen to even enable this. Zander stated that "we're making a bet that what happened to PCs will happen to these [smart phones]." That's a fine sentiment, but I'm not holding my breath. Do workers really need these applications on a cellphone (even a Treo or BlackBerry)? Traveling pros already have that three-pound sub-mini notebook computer -- why duplicate that onto a tiny cellphone with a tiny battery and limited processing power? This makes very little sense to me, but I guess it did not stop several manufacturers from making the "Ultra-Mobile PC" -- which has flopped in the year plus since it was introduced to the market.

After Motorola Inc. (NYSE: MOT)'s annual shareholder meeting last night, the company's bid to thwart billionaire Carl Icahn from attaining a seat on the company's board of directors must have worked. Icahn was pressuring to become installed on the board of the telecom and cellphone maker in his attempt to re-shape management and start a turnaround of the company. Clearly, Icahn was not pleased with the leadership of company CEO Ed Zander and would have heavily lobbied to get rid of him if he had won a board seat.

But, that did not happen. Icahn was not elected to the Motorola board and MOT shares tanked a bit his morning when trading started, as a result. As Icahn's bid to have Motorola take on more debt and return more to shareholders fell by the wayside, it also gave Zander more time and room to operate and get Motorola back on the road to hot products, rapid development and marketing and profitability -- something lacking from the company last quarter as the first quarterly loss since 2004 was put on the books.

This action buys Zander some precious time, but the road won't be easy. Competitors like Samsung and Nokia Corp. (NYSE: NOK) are eating away at Motorola's marketshare every day and the success of the Motorola RAZR is now fading sharply from view. It may take another market-disrupting product like the RAZR to get Motorola back on target again -- but is that even possible with the current technological state of the modern wireless phone? Doubtful -- there are few (if any) paradigm shifts left unless we all want to start implanting phones into our bodies or something. Perhaps Motorola should purchase a medical device company?

In spite of its lackluster performance of late, Motorola (NYSE: MOT) has decided it doesn't want King Icahn [subscription required]. CEO Ed Zander wrote letters to shareholders and employees saying Icahn is "not the right person to serve as a Motorola director." More puzzlingly, Zander wrote that Icahn's responsibility to his hedge fund investors "may conflict with his ability to represent all stockholders."

Now hold on. Icahn's responsibility to his hedge fund investors is to generate high returns. The board's responsibility to shareholders is to generate high returns. So what's the conflict? Given Icahn's ownership of 3% of MOT stock -- an investment worth over a billion dollars -- it's hard to imagine someone whose interests are better-aligned with those of outside shareholders.

Mr. Zander, it's beyond me why you wouldn't welcome one of the foremost business and governance experts of our time on the company's board. This looks like it has more to do with Zander's desire to keep control over the company than any altruistic desire to "represent all stockholders."

After beginning his involvement with Motorola (NYSE:MOT)with a relatively tame call for a share buyback, legendary activist investor Carl Icahn has upped the rhetoric at the company with an open-letter to the company's management that will be published as a full-page ad. The Wall Street Journal (subscription required)has reviewed the ad and it sounds pretty exciting: Icahn writes that the company has "Motorola has stumbled, and stumbled badly" and referred to a recent comment by CEO Ed Zander as "something straight out of Alice in Wonderland."

It'll be interesting to see what reaction the stock has -- several proxy firms have recently lent their support to Ichan's bid for a seat on the company's board, which should come as no surprise. When it comes to extracting shareholder value out of questionably managed companies, few can come close to Icahn's track record.

The companies current directors have reportedly questioned Icahn's knowledge of the company's business and technology in general. They may have a point. But when it comes to matters of corporate governance, few know as much as King Icahn. And when he calls for change, investors are likely to listen.

As I wrote a few weeks ago, financier Carl Icahn wants Motorola Inc. (NYSE: MOT) to engage in some stock buyback activity to pump up shares. Motorola investors (and wireless market pundits), on the other hand, want Motorola to come up with another cellphone hit like the 2004 RAZR handset. Motorola has been losing market share and its product lineup is lackluster -- all that amidst intensifying competition from Korean competitors, Samsung and LG.

What is a global wireless handset manufacturer to do? For one, 2007 will be Motorola CEO Ed Zander's largest test since becoming head of the company more than a few years ago. While hailed and credited as "turning Motorola around," Zander was recruited at precisely the same time that some exciting new products were just emerging. Now that those products (like the RAZR) have waned, follow-up product hits have not happened and Zander is left feeling the heat -- and it's scorching right now.

Will Icahn -- who holds 2.7% of MOT's outstanding shares -- succeed in his lobby to get Motorola to spend some of its cash hoard and buyback its own shares? Icahn, like any shrewd investor, wants the share price to increase based on less market dilution as a form of exit strategy most likely. No surprise here. Shouldn't the company re-focus on long-term product hit strategies instead of satisfying the short-term wants of a minority investor? We'll see.

Can Motorola Inc. (NYSE:MOT) get anyone off its back? If so, it sure won't be investor Carl Icahn, who has increased his position in the wireless handset maker from 2.48% to 2.7% while continuing to pressure Motorola management to return some of the company's $11+ billion cash pile in the form of share buybacks to prop up MOT shares to the point where he apparently thinks they need to be.

Icahn has also said he wants a seat on Motorola's board so he can horn in on what the company may be doing in its largest market -- wireless phones -- as well as see what the company plans to do to increase sales and its share price. In other words, Icahn probably wants to see what is going on behind the scenes of the phone maker that after its huge hit with the Motorola RAZR years ago, has waned on model breadth and profits in recent quarters.

All of this has cast a doubt on what Motorola CEO Ed Zander is actually doing at Motorola these days. There are those who believe he inherited a fine cast at Motorola and has taken credit for the recent resurgence in the company's fortunes from 2005 through the middle of 2006.

Since last summer, however, Motorola's model lineup has been stagnant and its profits have not met expectations. With a two-year timeline to get many products to market, any development under Zander's leadership should be coming to light now, but nothing has yet to be seen. Maybe Icahn wants a little more data on that, or just wants a payday using share buybacks as the vehicle.

Jim Goldman, CNBC's Silicon Valley Bureau Chief, apparently laid a big egg.

Goldman reported yesterday that Palm Inc (NASDAQ: PALM) was going to be acquired by Motorola Inc (NYSE: MOT) for $25 per share, according to his shareholder source.

More and more information pointed to Motorola as the likely acquirer. Ed Zander, Motorola's CEO, backed out of a speaking engagement for the CTIA Wireless conference and rumors had been floating around for weeks that Palm was soon to be sold.

However, Zander said last night during Motorola's conference call that he backed out of the speaking engagement for family reasons (it did come across as legit). Also, the naysayers for a Motorola deal came out screaming that there was little strategic fit.

Goldman's source said a Palm deal would be announced by Friday. Another Internet site, Unstrung.com, reported a Palm deal was to be announced by today. We will have to see if Unstrung.com is also being strung along.

Stay tuned to CNBC to see how Goldman covers his tracks. One could imagine Goldman had a serious conversation with the source before going on the air today.

Is Motorola, Inc. (NYSE:MOT) really spinning out of control? According to this Forbes article, the picture is incredibly bleak for Motorola right now.The "Motorola RAZR" fever that swept the wireless industry over a few years ago has worn off completely, and Motorola has fallen way behind rivals in getting new and exciting products to market. Samsung and Nokia Corp. (NYSE:NOK) are introducing new and fresh products every other day it seems -- but where is Motorola?

It's losing profit by leaps and bounds as it aggressively discounts older but still nice-selling handset inventory. Instead of competing with newer and rapid-fire models that are coming out of competitor Samsung these days, Motorola is bringing tired, old designs to market with more colors -- not exactly innovative. Sure, the Motorola RAZR brought the company back to the limelight in 2004 and 2005 -- but its handset product division is now old and boring according to industry experts. Is Ed Zander to blame?

He took the helm at Motorola just as the Motorola RAZR was being finalized in development -- so he had nothing to do with that success (although he took credit). The Street has been asking Zander "what have you done for me lately," and so far, he has no response. The once-hailed leader of Motorola during the last few years is seeing issues all over the place as competitors step up to quash it at every turn. Losing design and marketing wunderkind Ron Garriques to Dell last week will only amplify Motorola's misfortunes. 2007 will be the "put up or shut up" year for Zander -- will he survive?

The saying goes -- what Carl Icahn gets, Carl Icahn wants. Well, in most cases. Icahn didn't get what he wanted at Time Warner (NYSE:TWX) with the spinoff of AOL and other things -- and AOL's fortunes rose dramatically last year as it switched its business model from subscriptions to advertising. Icahn's prediction that AOL's partnership last year with Google Inc. (NASDAQ:GOOG) would be "disastrous," umm, really did not pan out like that. Just the opposite.

But what about Motorola In. (NYSE:MOT)? Some say that the inventor of the Razr-thin design of many modern wireless handsets wants to get Motorola un-chunked and bring out hidden assets within the company -- probably by splitting it up. Motorola has had a tremendous run since 2004 and has become the largest seller of cellphones in the U.S., although Nokia sells more handsets globally.

But the question here is "what is Icahn's motivation?" With Motorola sitting on $11.3 billion in cash, many financiers would want to see that value unlocked by...something. With Icahn recently demanding a chair on Motorola's board and with him owning 1.39% stake in the world's second-largest seller of mobile handsets, he may just get it -- and then turn instant telecom expert to start what Motorola needs to fend off rivals and drive itself to the top of the wireless heap. And then, we have the vision of Motorola CEO Ed Zander, which won't play nice with Icahn's vision most likely. Play nice, y'all.

Although Motorola (NYSE: MOT) sold more RAZR wireless handsets in its latest quarter than ever before, the company will be shedding about 3,500 jobs according to CEO Ed Zander. This comes as Motorola's profits sank over 40% in its latest quarter even as the wireless giant shipped more phones than ever.

Say it with me -- keep costs under control. Zander's past experience as an operational guru should bode well for MOT investors, as the guy apparently knows how to control costs and keep expenses down as most levels. But Motorola's mixed bag of results for its latest quarter smells of the earlier tenure of Chris Galvin more than operational expert Ed Zander.

The cuts will come from middle management as well (get rid of all that red tape!) and will comprise about 5% of Motorola's overall global employee base. The cost savings are estimated at $400 million annually as wireless handset profit growth is expected to soften significantly this year, even as volume ramps up a bit.

Motorola (NYSE:MOT) CEO Ed Zander stood up and gave a speech yesterday at the opening of the Consumer Electronics Show with a vision of all consumer electronics "going mobile". Um, Ok -- really? When I delved into the details of what he meant, some of what he said made sense while other pieces of the speech made little to no sense. Chalk it up to another executive "setting the future" for customers by possibly not understanding the customer in the first place.

Now, it's common knowledge that many companies create the marketplaces they sell and operate in and end up convincing customers to products and services where a pre-existing consumer need was either 1) not needed at all or 2) was untapped, but existed. Motorola wants to create that "everything mobile" future and then get customers into buying the vision it created.

As the saying goes, if the demand is lacking, create it. But customers are smarter than that, and can quickly weed out subpar offerings even with the almighty marketing glitz and spin that can occur when Harvard MBAs go crazy on the marketing train.

Zander is not that crazy -- some of his ideas about the potential for mobility in emerging countries (where wireless penetration is just starting to explode) are excellent sources of future revenue that should treat holders of MOT well if Motorola can execute. But, in established markets, I'm not sure "everything" will need to go mobile. If so, I'll be buying stock in battery companies -- as all these devices will need tons of portable power sources.