Yesterday Motorola announced it planned to acquire Symbol Technologies, a leader in the barcode and enterprise mobile solutions space. The deal was done primarily to help Motorola spread its mobile technology further into the enterprise segment. But little known to most investors is that Symbol is one of the leading developers of nano-projector technology that will be used as a small projection accessory for cell phones and other mobile devices, eventually shrinking small enough to become embedded in these products.
Sr. Analyst and Sr. Editor
of Insight Media
According to terms of the deal Motorola will pay $15 for each outstanding share of Symbol stock, bringing the value of the deal to about $3.9B, plus the ~$200M in cash that Symbol will throw in. In 2005, Symbol had sales of $1.8B, a 1.9% increase from 2004. The company earned $32.2M in profits, 61% less than in 2004, however.
"Everything is going digital, and everything digital is going mobile - this is especially evident in the way businesses are run today" said Motorola Chairman and CEO Ed Zander. "This transaction significantly advances Motorola’s enterprise mobility strategy and is consistent with our focus on building on our already strong intellectual property portfolio and extending Motorola’s seamless mobility leadership."
Symbol is indeed a good acquisition if that is Motorola’s goal as the company is already a leader in end-to-end enterprise mobility solutions featuring rugged mobile computing, advanced data capture, radio frequency identification (RFID), wireless infrastructure and mobility management. In addition, Symbol has a strong partner network and possesses deep domain knowledge and expertise in key verticals including retail, travel and transportation, manufacturing, wholesale distribution and healthcare.
Indeed, Motorola hopes to tap Symbol’s customer list, which includes Coca-Cola, FedEx and the United States Postal Service, to sell scanning devices and hand-held computers for warehouses, not to mention the wireless networks, walkie-talkies and mobile phones that Motorola makes.
According to a quote in the New York Times, "It’s a customer base to die for," said Gregory Q. Brown, president of Motorola’s Networks and Enterprise business. "The story today is not a cellular handset story. It’s about expanding the product portfolio beyond cellular handsets." The addition of Symbol would more than double Motorola’s business selling hand-held computers, radio frequency identification tags and other equipment used to track products in factories, warehouses and in stores.
And for the handset business, Symbol brings technologies that can help Moto gain on rival Nokia. For example, Symbol already has bar code scanners that could be integrated into cell phones, although they are a little bulky today. This would allow consumers to scan objects at retail and get valuable information. In Japan, phones already are using the camera to capture a picture of the bar code to translate the information.
In addition, Symbol is developing nano-projectors that use tiny lasers to create a small image. This is a hot area of investigation by all the handset makers as it offers a new way to create a bigger picture from a small volume, thereby by-passing the physical limitation of the direct-view displays on cell phones and other mobile devices.
While the handset market is expected to reach record level this year - close to 1B units - clearly Motorola is thinking even bigger in scoping out the next frontier: the enterprise. All ahead full.