2006-09-26 Briefing: Symbol Technologies, Life After the Motorola Acquisition (By Steve Banker)

Symbol has certainly been in our thoughts over the past two weeks.  Last week Symbol briefed industry analysts on their plans for the coming year at an event in Boston.  Then this Tuesday (September 19th) Motorola announced that it would acquire Symbol and held a second teleconference for analysts.  Later that day ARC had a third briefing, giving us a chance to ask Symbol more questions in private

Our first thought was that Symbol’s announced product plans and strategies for the coming year no longer mattered, since these plans had been superseded by the acquisition.  During the call for financial and industry analysts, Motorola CEO, Ed Zander, kept coming back to the theme of enterprise mobility.  The two companies, in tandem, could accomplish what neither could accomplish on their own: a fully digital, mobile infrastructure

This infrastructure would encompass Symbol’s forte; i.e. wireless LANs supporting Automatic Identification terminals and rugged mobile computers that primarily operate inside buildings.  It would also encompass Motorola’s strength; i.e. a wide variety of RF devices serving almost every segment of the market, along with technological leadership in present and future wireless technologies, such as 3G and WiMAX.  There is not much overlap between the two companies pre-merger, and together they support devices that are on a path towards convergence, a vision of mobile devices that can hop onto any available network (and across different infrastructures) enabling true enterprise mobility.  Their goal is to be able to go to the CIO and argue that Motorola can meet all enterprise mobility needs and provide platforms that ease management of these diverse infrastructures, providing a much lower Total Cost of Ownership (TCO) as well as more focus on applications than is possible today.

Wonderful vision!  It is easy to get caught up in it.  But, the reality, which Symbol acknowledges, is that this is a long term vision.  It won’t be achieved in a year, or even a few years.  In the short term Symbol needs to remain profitable.  Motorola recognizes what Symbol brings to the table in terms of brand equity, intellectual property, and the intellectual capital of their people.   The Enterprise division, which will include Symbol and Motorola people, will be headquartered in Symbol’s current headquarters on Long Island and led by top Symbol executives.

So, the truth is that the short term plans announced by Symbol at last week’s meeting prior to the acquisition still do matter.  To drive profitability, Symbol continues to focus on the CIO.  What CIOs care about is a low cost of ownership.  Symbol’s wireless LANs and mobile devices are supported by a platform that allows for remote provisioning and maintenance of the devices.  Their service division, for equipment that can’t be repaired remotely via the platform, is driven by a continuous improvement philosophy and has strong and improving performance metrics like turn around time.  Symbol’s key products have now gone through a round of technological refresh.

Wireless infrastructure is a key product for Symbol and is focused around their recently introduced Wi-NG or ‘Next Generation’ wireless architecture.  During the Boston event, Symbol insisted that supplying their own wireless infrastructure was a critical part of their future vision.  Symbol’s strategy here is in stark contrast to their rival Intermec, who chose last year to focus on edge devices, and then allied with infrastructure leader Cisco Systems, rather than continue to develop Intermec Wi-Fi infrastructure products.

ARC believes in the prospect of fixed-mobile convergence.  The market will demand mobile computing with cellular voice, Voice-over-WLAN, and perhaps real-time location services and this helped persuade Intermec to focus completely on client devices.  Now Symbol’s new owner is a market leader in the multi-band cellular handset market, so future Symbol wireless clients will likely benefit from Motorola’s depth in this area.  This makes Symbol’s infrastructure decision more appealing.

Symbol also offered analysts a peek at a roadmap for future wireless infrastructure products.  In addition to providing wireless mesh infrastructures (that will be standardized by IEEE 802 in 1-2 years), Symbol has some very rugged Wi-Fi products on tap.  Symbol and Motorola certainly have manufacturing customers in common.  With the acquisition, it might make sense for some of these manufacturers to take inventory of all the equipment they already operate from Symbol (scanners, readers, mobile computers) and Motorola (mobile phones, portable radios, etc.), as well as their existing and planned wireless infrastructures, and then ask the combined company specifically what benefits they might expect from this merger down the road, when the two companies are really working together.

RFID figured prominently in Symbol's messages throughout the day.  In particular, the company's Mobile RFID strategy was emphasized in the context of Symbol's overall Enterprise Mobility motto.  While tag products, including specialty tags for metal mount or asset tracking, were presented as part of the overall RFID package, new RFID readers were more prominently featured at this event.  Again, the emphasis was on Mobile RFID solutions, with RFID integrated into a variety of mobility applications, such as wearable readers, handhelds, and forklifts.

The just-released RD 5000 mobile reader is a lead item in the Mobile RFID strategy.  This Windows Mobile-based reader features an integrated antenna, WLAN compatibility, and environmentally rugged housing and is currently available only in the US and Canada.  EMEA and APAC availability are slated for 2007.  Forklift mount readers are all the rage in the RFID market now as retail suppliers realize that dock door portals are too expensive and too rigid for their requirements.  While other RFID suppliers have announced dedicated forklift readers, the Symbol RD 5000 is a flexible mobile platform that can easily be used in forklift mount, as well as other mobile RFID applications such as stretch wrappers and pallet jacks.

Several additional readers are slated for Q4 introduction.  These include the MR400 Dense Reader Module, the Windows CE-based, scalable XR 440 fixed reader for high performance applications, and the MC9090-G handheld that features Windows Mobile 5.0, 802.11b/g, and Bluetooth compatibility.

Symbol's vision of the future of RFID includes item-level applications, integrated sensing, and networked RFID.  The item-level applications are focused on use of UHF near field communication (NFC), rather than the HF frequency we see in some other applications.  The integrated sensing vision includes active tags, which are not currently part of the company's repertoire, while Wi-Fi tags make up part of the networked RFID vision.

In short, the acquisition by Motorola presents some wonderful future opportunities, but Symbol can’t take its eye off a domain in which they are a leader, despite becoming part of a far larger and more diverse firm.