In recent years, Motorola Inc. had reason to be prouder of its past than its present.

The company, based in Schaumburg, Ill., built some of the first car radios, provided walkie-talkies for U.S. soldiers in World War II, enabled astronauts on the moon to talk to earth and led the development of cellphones. In 1996, when it introduced the hugely popular StarTAC cellphone, Motorola controlled more than half the global cellphone market.

From that lofty perch, Motorola declined steadily, a victim of its insular culture and inattention to a changing, and increasingly competitive, marketplace. In 1998, Nokia Corp. of Finland zoomed past Motorola in global market share of the cellphone business, when Motorola was slow to shift to digital technology from analog and ignored style and design. And for a brief period last year, it slipped into third place behind South Korea's Samsung Electronics Co.

The telecom bust at the beginning of this decade compounded the problems, prompting more than 60,000 job cuts in recent years, or 40 percent of the total at its peak in 2000. In January 2004, Motorola for the first time handed its reins to an outsider: Ed Zander, the former No. 2 at Sun Microsystems Inc.

Mr. Zander's predecessor as chief executive officer, a grandson of the company's founder, sowed seeds for a turnaround, including hipper products, a spinoff of the company's capital-intensive semiconductor business and much cost cutting.

Building on that, Motorola under Mr. Zander has churned out five consecutive profitable quarters, exceeding Wall Street expectations and regaining the No. 2 position in the handset market from Samsung. Revenue surged by more than a third last year to $31.3 billion, enabling Motorola to pay down debt and make 2004 one of the company's most profitable ever.

Mr. Zander has also revamped the company's once staid image, with a slew of cool devices and ads, featuring Motorola's trendy "batwings" logo. Its ultraslim RAZR cellphone has become the must-have handset since it was introduced last autumn, serving notice to Nokia that things are changing at Motorola.

Still, in a wide-ranging interview, Mr. Zander acknowledges there is much work to be done. Among other challenges: Operating margins remain about half those of Nokia; competition continues to intensify, as customers, namely carriers, consolidate; and the global handset market is expected to grow by about half the rate of last year. But Mr. Zander has high hopes for the cellphone's future, likening the wireless industry today to the computer industry in the 1980s.

Some excerpts:

WSJ: Motorola in recent years has been seen as a boring brand. How do you intend to make Motorola cool?

Mr. Zander: When I came here on January 1, 2004, I didn't think much about cool. I thought about making a quarter, meeting financials, meeting customer-delivery dates, developing the products on time, better quality. (He picks up a RAZR cellphone.) ... I bumped into this thing a year ago April, and I thought it was cool. I would walk around with it on the streets of Chicago or in restaurants or with friends, and when they saw the RAZR, they just couldn't believe this phone and said, 'I gotta have it.' Cingular actually got in early with us, helped us refine it a little bit, and took a risk with it.

WSJ: Can one cool product change the company's image?

Mr. Zander: In terms of the bottom line, sure we sold a bunch of RAZRs in the second half of the year. But in terms of the overall number of cellphones sold worldwide it was a very small fraction of it. What it really did do though was get Motorola in the minds of a lot of people around the world for being cool again. I also think it did a lot for employees, because you start getting employees believing again you can win.

The RAZR is now the iconic design we want to build a lot of our products on, such as candy-bar versions, video versions, music versions and a number of different versions. Motorola wants to own the iconic thin approach here.

WSJ: Motorola appeared stuck in the mud when you joined. What was the first thing you tried to change?

Mr. Zander: We had to get back the sense of confidence that you can win. It's like any ball team. How do you get the winning attitude? ... Some of it's got to do with psychology. I think we have to re-energize the company to think that we can win and be No 1. We're not there yet, but that's the mission I'm on.

WSJ: What still needs to improve at the company?

Mr. Zander: Motorola's got a thick culture. I had to learn it, and it's been hard bringing the things I think are valuable, such as a sense of urgency, fast decision making, shareholder value, competition. I don't want to imply that none of that was there, but it was not to my liking, not after living in Silicon Valley for 17 years. I got the feeling that there were days the company was on autopilot to a degree.

WSJ: How do you change a culture that's entrenched over decades?

Mr. Zander: The question is how fast do you step on the gas pedal? I always want to go a hundred miles an hour. But you can blow the engine on a car if you drive that fast. There are days I know I can only go fifty or sixty. It's going to take several years to build a high-performance company.

I think we ought to get back to putting the customer first. As simple as that sounds, I think it's something that every American corporation, every corporation around the world, sometimes takes for granted.

WSJ: How could you tell Motorola was not practicing this?

Mr. Zander: I just felt like, why weren't we talking about Nokia every day? Why weren't we talking about Verizon every day? Why weren't we talking about shareholder value? Are we here to make money or not? Or are we here just to work and go home? I noticed that after three weeks, nobody was in my office to call a customer. I thought it was strange. In my previous life, we'd bring a customer in or we'd be pounding away at our market share. And I just didn't see that. So I asked who our top customers are and started calling them, and then visited them, one by one.

WSJ: Are there tangible signs of progress in the areas you want to change?

Mr. Zander: We've had a couple of defining deals. We were told in three cases we were losing a deal. They were very big ones. So we went back in there and we hit them high, we hit them low, and we hit them in between, and we reversed some of the deals and won.

WSJ: Did you bring any lessons from your time at Sun?

Mr. Zander: Yeah, we had a Sun rule that says if you're a salesperson you're not authorized to lose a deal. You go to the person who told you you lost and say, "You've got to see my boss because I'm not allowed to lose this." We've still got a ways to go to create a high-powered sales force.

WSJ: How would you describe your management philosophy?

Mr. Zander: Whack yourself before somebody whacks you. I used to have these meetings called the whack meetings at Sun where we'd think about what could happen to us and what we have to do to keep that from happening. That approach led to the creation of Java and a lot of the Internet.

WSJ: Do you think there are parallels between the world of computers and the telecom world?

Mr. Zander: I think we're undergoing a transformation, big time, similar to what we saw back in the 1980s with personal computers. I think we're getting mobile devices that are going to transform our lives. And I think a phone call is just one of the many things you'll be able to do with these devices. They'll unlock your car doors or your home. They'll pay for purchases like a credit card, which they're already doing in some countries. So this device could replace your wallet and your keys.

WSJ: Is Motorola developing such products and services?

Mr. Zander: Yes, we're working with car companies and credit-card companies. There's a lot of R&D. I would venture to say there's more R&D today in mobile communications than there is in the computer industry. The rate of technology innovation is even quicker now ... I see TV on these devices. I just see things happening.

WSJ: In the handset market, where is your growth coming from geographically?

Mr. Zander: We got back to No. 1 in Latin America. And we put a big strong push in Europe, and we're No. 2 there now. And in China we're holding our own. To give Nokia a little credit, they focused on emerging markets a little earlier than we did because we were busy getting our house in order. But people in these developing countries want to make calls. And eventually they'll want to take pictures and hear music and do other things. So that is a big, big growth opportunity for us.

WSJ: Your company likes the buzzwords "seamless mobility." Can you give us some examples of how you use seamless mobility in your own life?

Mr. Zander: Here's my latest toy. (He pulls out of a bag a pair of Oakley sunglasses with a tiny cellphone earpiece and microphone attached to one of the arms and puts them on.) This actually works. I've been using these all day. (He then pulls out another pair, this time with an MP3 player attached to one of the arms.) We are making these into one device, where you can play music and get a phone call.

I just built a home in California. And now we have a home monitor system, which I can connect to with my cellphone. So I can sit here and look at rooms live or get alerts if there's anything wrong.

WSJ: There's been a lot of consolidation among U.S. carriers in the past 18 months. Do you expect telecom vendors to follow?

Mr. Zander: Yeah, I think things will happen. But it's not easy. Tech has not had a great track record in M&A.

WSJ: How much management upheaval has there been at Motorola?

Mr. Zander: The real challenge for corporations that are trying to transform is in the VP ranks. That's where the blockage is. A lot of companies have clogged arteries. So we have undergone a transformation of our vice-president ranks. I don't know how many dozens of VP's are no longer with us. Some have left on their own accord, some have not.

WSJ: Your stock price hasn't moved much, despite all the changes you're making. Why not?

Mr. Zander: I don't know. I think you have to discipline yourself to take a longer view. The market wants predictability. It wants not just one good quarter. It doesn't even want a great quarter. It wants six good quarters or 10 good quarters or 12 good quarters. We've done five.

WSJ: Can you knock off Nokia from the No. 1 position in the handset business?

Mr. Zander: We want to be No. 1. I don't wake up in the morning and say I want to finish third. I mean, do the Yankees get up and say we'll finish third this year? You've got to go to the ball field and think about finishing first.