Motorola’s woes are basically self-inflicted, according to co-chief Greg Brown, who in a very frank interview with the FT.com on what went wrong at the once mighty handset maker, said, “I think the majority of the challenges Motorola (NYSE: MOT) faces are our own doing. The economy exacerbates it but certainly didn’t cause it.” The laundry list of screw-ups is long: it includes Motorola’s well known and ill-fated decision to pursue market share by slashing prices beyond sustainable levels in emerging markets and its complete inability to follow up the fabled Razr with any thing remotely appealing to consumers. But Brown also points out how Motorola completely missed the rise of the smartphone, failed to see the growing importance of mobile software rather than handset design, and got itself bogged down in trying to create its own operating system based on Linux and Java software. Finally, as other handset makers were looking to simplify, it was “rolling against the tide” using a variety of OS’s and chipsets.

Despite these very deep problems, Brown said he expected the company to show signs of improvement in the second quarter, when Motorola should report a smaller operating loss in Q2 compared with the first three months of the year. Brown also stood firm and dismissed notions of packing the troubled cellphone unit up, or unloading it to a competitor (though, considering at least three of its rivals have pretty much said they wouldn’t touch it with a barge pole, this isn’t really an option any way).

Brown apparently struck an optimistic tone with the FT. It’s now positioning itself as a niche player, and is throwing its fortunes behind mid to high end phones based on Google’s Android OS. But for it to claw its way back to profitability is going to take some doing. Handset sales are slowing around the world, and in its home market the US, Motorola is facing formidable competition from Samsung and LG (SEO: 066570). It may be content to be “niche”, but they still have to deliver something worth buying. But Brown insisted Motorola was on its way back, and that at least its carrier partners had some faith in it. He said, “I don’t think it’s a situation where [the operators] are testing our oxygen levels.”