Cell-Phone Shuffle

By Sean Gregory

The world's two largest cell-phone makers are cleaning house. Motorola's Christopher Galvin, grandson of founder Paul Galvin, resigned as CEO in September after six years at the helm. The company then decided to dump its semiconductor arm. Then Helsinki-based Nokia shuffled top management positions, bringing in Rick Simonson as chief financial officer, the first Yank to crack Nokia's upper ranks.

Previewing the holiday season, analysts give Nokia the nod; Motorola's profitability lags Nokia's, and Motorola has been slow to deliver a camera phone in the U.S., a setback since sales of this item could double, to 16% of the industry total, in 2004. Writes Paul Sagawa of Bernstein Research: "The rest of the competition will eat away at its market share."