Global Insight Perspective | |
Significance | Motorola has announced that it is to purchase enterprise mobility company Symbol Technologies for US$3.9 billion, or US$15.00 per share. |
Implications | Through the purchase Motorola will gain a large number of enterprise clients and distribution channels, doubling its presence in the market. It will also acquire significant intellectual property, with patents on various WLAN, RFID, scanning and imaging products, as well as new R&D resources and product lines. |
Outlook | Although it will mainly impact the enterprise mobility market as a fairly major consolidation, synergies between the two companies may lead to the development of new crossing mechanisms between fixed and mobile networks, and the integration of alternative technologies into Motorola’s consumer products. |
Motorola has announced that it is to buy all outstanding shares in Symbol Technologies for US15.00 per share, or US3.9 billion in total. Symbol is focused on the enterprise market, particularly asset tracking and management. The acquisition will enhance Motorola's capabilities in the Enterprise mobility sector and will form the basis of Motorola's Networks and Enterprise business unit, run by the current chief executive officer (CEO) of Symbol Technologies, Sal Iannuzzi. Symbol’s products include rugged and wearable computers, Automatic Identification and Data Capture (AIDC), Radio Frequency ID (RFID), WLAN and a mobility management platform. Symbol has a large number of patents (910 U.S., 680 International) in areas including scanning, imaging, RFID, WLAN and VoIP.
With this acquisition, Motorola will build on its capabilities in the enterprise market. The company will gain a large number of enterprise clients, particularly in the areas of retailing and wholesale distribution, manufacturing, transportation and healthcare. Motorola currently has strengths in government, petrochemicals and utilities. With a distribution and sales network of over 12,000 channel partners, Symbol bringing Motorola's partners to 21,000. Savings from combining the two companies are expected to be US$100 million per year by 2008, arising from supply chain efficiencies and elimination of duplicated back-office functions. As part of the rationalisation of the two product portfolios, some consolidation of shared research and development capabilities is likely, although redundancies are not predicted.
Outlook and Implications
- Enterprise Mobility Market: This will combine the strengths, customer and product base of Motorola and Symbol to create a company that could dominate the market for enterprise mobility services.
- Fixed-Mobile Convergence: The capabilities of Symbol enable mobility within the enterprise, including integrating back-end systems to run on mobile devices over Wi-Fi and cellular networks. This acquisition, which includes related patents, should help Motorola to develop capabilities in its "Seamless Mobility" initiative, allowing users to move from mobile to Wi-Max and Wi-Fi networks.
- Consumer Devices: The technologies that enable the flow of information within an enterprise environment also have possible consumer applications. Synergistic uses of Symbol technologies are likely in Motorola's consumer device development. Possible uses include mobile wallets, context-aware applications, and embedded information using RFID. Scanning technologies have also been touted as a method for inputting data such as website addresses from printed materials to mobile handsets.