Motorola’s chief executive, Ed Zander, could be facing a bleak future after the US mobile giant reported a 94 per cent slump in third-quarter profits as handset sales plunged.

Earlier this year, Carl Icahn criticised Mr Zander for his leadership of Motorola after it issued two profit warnings in five months. The billionaire activist investor owns 3 per cent of the group.

Motorola posted a $60 million (£29 million) profit during the third quarter, below Wall Street expectations and compared with $968 million in the same quarter last year.

Sales fell from $10.6 billion last year to $8.81 billion. The company has been experiencing problems after cutting prices on their mobile phones to increase market share at the expense of the profit margin.

Motorola said sales of mobile handsets fell by 36 per cent although the company still managed to sell 37.2 million handsets in the quarter - more than analysts had expected.

The company insisted that strategic changes were helping to improve its operating cash flow and expects to increase profits in the fourth quarter.

Motorola recently announced that it intends to compete with the BlackBerry's mobile e-mail service and design phones with social network-type services in mind.

Mr Zander said: “We are pleased with the improvement in the financial performance of mobile devices and we look forward to building upon the progress we have made.”

For the first nine months, Motorola recorded a $149 million loss on sales down 13 per cent at $30 billion.

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