Analysts Laud Motorola-Symbol Deal - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Analysts Laud Motorola-Symbol Deal

The $3.9 billion matchup is seen as a good fit, especially in terms of integrating mobile computing and sensing technologies like RFID and wireless communications.

Dubbed one of "the most exciting investments in mobile computing and sensing technologies," Motorola's largest acquisition in years " the purchase of RFID and wireless communications company Symbol Technologies Inc. " was hailed by analysts Tuesday.

Motorola said it would plunk down $3.9 billion, or $15 a share in cash, in the deal for Symbol, the Holtsville, N.Y.-based maker of bar-code scanners, Palm OS- and Windows-based handheld computers. Symbol is also widely known for wireless networking and equipment for radio frequency identification technology platforms.

Calling it an exciting investment for Motorola, Dan Mullen, president at AIM Global, an automatic data collection consortium, was markedly upbeat about the prospects for the merged companies. "The most exciting thing is seeing the integration of mobile computing and sensing technologies like RFID and wireless communications," he said. "There's a natural collaboration between these technologies."

ABI Research director Michael Liard said the companies are a good fit. "Symbol has been branding itself as an enterprise mobility company where Motorola is a dominant force," he said. "The two industry giants that have complimentary solutions are coming together."

Motorola has been looking at the RFID space for years from many angles. Liard, who focuses on RFID and contactless technology, said the deal combines wireless mobility and telecommunications and supports the convergence of RFID with other wireless technologies, such as WLANs, WiFi, mobile devices, the 'mobile edge'.

The acquisition marks the Motorola's largest deal since buying cable TV set-top box maker General Instrument for $17 billion in 2000. The deal makes Motorola the biggest seller of handheld scanners with integrated RFID to track goods. "Think about Wi-Fi on steroids extending to Wi-Max, with duel mode devices on top where we have great expertise in certification and designs of great cellular handsets," said Greg Brown, president of Motorola's Network and Enterprise business, during a call with analysts. "Then add Wi-Fi or duel-mode Wi-Fi Wi-Max chips, and you've got from cradle to grave a pretty powerful portfolio."

Motorola recently merged its network equipment unit with its enterprise unit that sells communications devices to large corporate customers. Symbol's patent and device portfolio will enable Motorola to continue integrating cellular with 802.11 to provide better performance in cities. Symbol holds roughly 900 patents; supports 12,000 channel partners; and has more than 5,000 employees worldwide. A sampling of Symbol customers include brand names like Pacific Cycle, Boeing, Albertsons, Lockheed Martin, Honda, Purdue, Walt Disney, Sears Canada, Wal-Mart, and more.

In 2005, Symbol shipped 11,500 readers, 3,000 handhelds, and 50 million tags, estimates Jeff Woods, principal analyst at Gartner, citing Symbol's numbers. Woods sees the RFID hardware marketing growing at a 39.2 percent compound annual growth rate, pegging the total market this year for RFID hardware at $372 million.

"We expect hardware to become a billion dollar business in 2008," Woods said. "Motorola will help because it's serious about making large and significant bets to transform RFID, whereas Symbol was willing to do a lot with pilots."

Symbol suffered financial, accounting and intellectual property troubles during the past several years as it focused on supporting suppliers to the Department of Defense and retail stores in deploying RFID infrastructures.

The company's future had become the subject of mounting speculation since intellectual property battles heated up for years between Symbol and rival Intermec Technologies Corp. There were five disputes total.

Symbol and Intermec revealed in July they resolved claims through a cross-licensing agreement, though neither has revealed the number of patents or details regarding the licenses. The lawsuits were based on claims by both that each infringed on IP for bar-code and wireless technologies employed in automatic identification devices.

The deal between Motorola and Symbol is the second by a major corporation this year to acquire a company focused in the RFID market. In May, Lockheed Martin Corp. announced it would acquire RFID provider Savi Technology Inc., Sunnyvale, Calif.

Savi develops logistics platforms that track in-transit asset shipments. Its hardware and software products have been implemented by the Department of Defense, international defense agencies, civil agencies and commercial enterprises to monitor cargo shipments globally.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
Why 2021 May Turn Out to be a Great Year for Tech Startups
John Edwards, Technology Journalist & Author,  2/24/2021
How GIS Data Can Help Fix Vaccine Distribution
Jessica Davis, Senior Editor, Enterprise Apps,  2/17/2021
11 Ways DevOps Is Evolving
Lisa Morgan, Freelance Writer,  2/18/2021
Register for InformationWeek Newsletters
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll