Shifting Gears at Motorola

To address a steep drop in profits, CEO Ed Zander is cutting jobs and betting on an open-source software platform for smarter phones

Less than a year ago, Motorola (MOT) Chief Executive Ed Zander could do no wrong. His company was sizzling with the success of its iconic, ultraslim RAZR phone. During the second quarter, ending in June, the world's No. 2 mobile-phone maker posted a 53% jump in handsets shipped, nearly twice the growth posted by its bigger rival Nokia (NOK). Motorola's sales and profit soared as well.

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