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A Symbol of the New RFID Market

Symbol Technologies’ decision to acquire Matrics is a sign that the RFID market is maturing and is good news for end users.
By Mark Roberti
Aug 02, 2004At about 8 a.m. on July 27, as I was preparing to open the second day of the RFID Journal University at the Millennium Hotel in New York, I received a phone call from a reliable source who told me Symbol Technologies would announce that it was planning to acquire Matrics for $230 million. My heart raced as I made a few phone calls to our staff to make sure we had the story covered. It was still racing when I broke the news to the 100 or so University attendees that "two of our sponsors—Symbol and Matrics—have become one."

Throughout the day, everyone was buzzing about the acquisition, and my inbox was flooded with e-mail from people who wanted to know what it meant for Alien Technology, one of Matrics’s chief rivals, for Intermec, which is suing Matrics (Intermec was also one of our sponsors), and for the industry as a whole.

My first thought was not about those companies. My first thought was that this is symbolic of the changes in the RFID industry. Two years ago, it would have been hard to imagine Symbol spending $230,000 for an RFID company, never mind $230 million. No company shells out that kind of money without knowing that there is a very large market for the acquisition’s products and services.

It's not clear to me yet how this will affect Alien and Intermec, or whether this is the start of an expected consolidation phase in the RFID industry. What is clear is that this is good news for end users. Symbol is a big company with a strong sales force and services organization. As RFID takes off, companies will need big companies that they can turn to for products and support.

The marriage of Symbol and Matrics makes sense for both companies. Symbol has been slow to develop RFID products, so it now has proven technology. Matrics gets the ability to grow far more rapidly than it could alone, and it can tap into Symbol's large customer base.

But in the end, it's all about execution. Matrics has done a good job of executing on its EPC strategy over the past two years. It has won some major contracts—the Boeing, H.D. Smith, Hong Kong Airport, McCarran Airport and others. It will be up to Symbol to build on this success and continue to provide readers and tags that perform well (Matrics' strong suit up to now), and to combine these products with Symbol's own infrastructure products—data capture terminals, wireless LANs and middleware platform—to deliver real business value.

The RFID market is maturing rapidly. My guess is we will see more companies making acquisitions in order to provide a more complete product offering or to be able to better service their customers. And that's a healthy sign for the industry.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.

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