WHERE THEY CAME FROM
One day in 1930, brothers Paul and Joseph Galvin invented a playful name for the new car radio their two-year-old company had just introduced. They combined “motor” with “ola,” a suffix they associated with sound (think Victrola). By the 1940s, Galvin Manufacturing, headquartered in Chicago, was making walkie-talkies used at the battlefront; that company became Motorola in 1947. In 1969, a Motorola radio transponder relayed Neil Armstrong’s famous words as he stepped onto the surface of the moon. And in 1983, Motorola introduced the first commercial cellular phone, a plastic brick weighing 1.75 pounds.

WHAT THEY DO
Motorola is the No. 2 maker of cell phones in the world in terms of market share, falling just behind Nokia and holding a slim lead over Samsung. The company also manufactures such devices as cable modems and the set-top boxes used to decode digital-TV signals, and it provides networking services to consumers, businesses, and governments.

WHAT THEY GOT RIGHT
A study in American entrepreneurship, Motorola, now based in Schaumburg, Illinois, was the No. 1 maker of cell phones in the technology’s early days. In 1996, Motorola’s trim StarTac debuted as the first clamshell phone and, at 3.1 ounces, it acquired high status among early adopters. Years after the StarTac’s discontinuation, devotees were still combing eBay for replacements.

But as sales of cell phones skyrocketed, competition threatened Motorola. Nokia stole Motorola’s spot at the top in 1999. In 2003, C.E.O. Christopher Galvin stepped down to make way for outsider and former Sun Microsystems C.O.O. Ed Zander, but the decline continued. The company experienced a humiliating Christmas season in 2003 when it failed to produce enough phones to meet holiday demand, and Samsung replaced Motorola as No. 2 in 2004.

A new phone introduced in the summer of 2004 brought Motorola back from third place. The company gave veteran engineer Roger Jellicoe, who had worked on the StarTac, and an all-black-wearing industrial designer named Chris Arnholt an unlimited budget to produce the thinnest phone ever. Their mission was kept top secret, lest competitors produce a rival even before the new phone was released.

Their collaboration resulted in the successful Razr V3, an ultra-thin phone with a price tag of $500—somewhat costly but not enough to dissuade gadget lovers from shelling out for it. In the second quarter of 2005, Motorola’s earnings hit $933 million, a vast improvement over the $203 million loss it recorded in the same quarter of the previous year.

WHAT THEY GOT WRONG
Zander didn’t know when to stop pushing the Razr. He offered the phone at enormous discounts as a way for Motorola to sell its way back to No. 1, but as the Razr became ubiquitous—offered almost free with some service plans—customers upgraded to flashier phones by Samsung and Nokia, and Motorola follow-ups such as the Krzr have struggled to sell, perhaps because of their similarities to the Razr.

Early 2007 wasn’t kind to Zander. Motorola’s stock had plunged in late 2006, and Zander announced plans to cut 3,500 jobs. Then came the news that billionaire investor Carl Icahn, who owned 1.4 percent of the company, wanted to increase his stake to 6 percent and join the board. The final blow: Ron Garriques, head of Motorola’s mobile-phone division, left for Dell in February.

WHAT'S NEXT
Vowing to earn Wall Street’s respect, Zander launched a new plan in Europe, where director of marketing Simon Thompson is on a mission to nurture an emotional attachment in customers who see Motorola’s products as just "cheap, pretty phones." Thompson wants to cultivate "brand love," ­not more Razr attempts. The focus will now be on more nuts-and-bolts aspects of cell phones, such as functionality and customer experience—not just more “cool” design.