Motorola, the biggest mobile phone handset maker in the United States, has appointed Sanjay Jha to lead its ailing mobile devices division in the run-up to its demerger from the group next year.

Dr Jha is faced with turning around the loss-making unit and ensuring that it can operate as a standalone business.

It is hoped that the split, which Motorola hopes to complete by the third quarter of 2009, will revive the group's fortunes. The handset business has reported losses for six successive quarters.

Motorola's profits and market share have slumped and its share price has tumbled as it failed to find a replacement for its popular Razr mobile phone, which sold more than

50million units. Shares in the group have fallen by more than 60 per cent since October 2006, when investors began to become disillusioned with the company's falling sales. Its global market share has fallen to 9.5 per cent from 24 per cent two years ago, taking it from second to third place behind Nokia and Samsung.

In March Motorola agreed to float the handset unit after pressure from Carl Icahn, the billionaire activist shareholder, who argued that the failing division should be restructured.

Mr Icahn, who is the group's second-biggest shareholder with a 6.3 per cent stake, had hoped to appoint Keith Meister, who runs Mr Icahn's $8 billion (£4.08 billion) investment fund, as head of the handset unit.

Motorola has been searching for a chief executive of the unit since March. Greg Brown, who became chief executive of the group last November, stepped in to lead the division in the interim.

Dr Jha, 45, who was born in India, lived in Britain for 15 years before moving to the United States in 1994 to work for Qualcomm, the wireless technology developer. He was was made chief operating officerby Qualcomm in late 2006. He has also been made co-chief executive of Motorola group alongside Mr Brown, who will continue to run its home entertainment and public safety units.

Simona Jankowski and Thomas Lee, analysts for Goldman Sachs, called his appointment “a big win” for Motorola and a loss for Qualcomm.

Ben Wood, head of research at CCS Insight, said: “Sanjay Jha is very well connected in the mobile industry and knows the challenges facing him. Taking on that role is a hugely daunting task, but I think he has the personality to pull the company forward.”

Others fear that resuscitating the unit may be too great a challenge. Carolina Milanesi, research director for mobile devices at Gartner, said: “He's very knowledgable and very no-nonsense, but I don't know if he has enough vision to turn things around in terms of design and brand.”

Last week Motorola surprised Wall Street by reporting a small second-quarter profit, led by the success of its home entertainment and public safety units. Although sales of its mobile phones grew to 28.1 million in the second quarter, up from 27 million in the first, the group predicted slowing sales in the third quarter. Qualcomm said that Len Lauer, its executive vice-president, would replace Dr Jha.

Shares in Motorola rose $1.01, or more than 11 per cent, to close at $9.82 in New York. Qualcomm’s shares fell $2.60, nearly 5 per cent, to end the day at $52.87.

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