Apr 27, 2014Zebra Technologies' acquisition of Motorola Solutions' enterprise business, which sells mostly bar-code and RFID equipment, is a very big deal (see Zebra Buys Motorola Solutions' Enterprise Business, Motorola Exits Stage Left and What's Behind the Motorola Deal). It presents Zebra with enormous opportunities—and some risk if the company doesn't get the merger right.
The potential upside for Zebra is on the RFID side. There might be steady business providing replacement bar-code scanners, but it will never again be a high-growth business. The RFID industry, on the other hand, is beginning to gather real momentum, and will pick up steam during the next few years.
Zebra is known as a manufacturer of bar-code printers and RFID printer-encoders, and the company should see tremendous growth in sales of its printer-encoders. But the firm will have to work hard to change its stripes and let the world know that it now offers a complete line of handheld and fixed RFID readers as well.
Motorola did an outstanding job of building its brand in the RFID industry after it purchased Symbol Technologies in 2006 (see Motorola Acquiring Symbol). The company advertised its RFID readers on RFID websites and sponsored RFID events. It was highly visible. As a result, when RFID Journal asked end users which RFID companies they knew, most could only name Motorola as a maker of readers.
But it is not guaranteed that because you buy a company, you will inherit its mind share. Systems integrators will surely know to go to Zebra for handheld and fixed readers after the deal closes. But end users don't know much about who sells RFID, and they won't automatically think of Zebra for handheld and fixed interrogators—unless Zebra rebrands itself.
The good news for Zebra is that the people who handled the RFID rebranding at Motorola will be coming over as part of the deal, and will be able to share their insights into what worked well when Motorola rebranded Symbol's RFID products as Motorola products.
In addition to rebranding, Zebra should consider the implications of Checkpoint Systems' recent deal with Mojix (see Checkpoint Partners With Mojix to Offer Passive RTLS in Stores). It involves two important trends in the RFID industry.
First, companies are partnering to provide end users with a complete solution. End users generally do not want to buy readers from one company and software from another, and then hire yet another firm to put the system together (tags are largely reliable and are readily available from any number of sources). A complete solution reduces deployment risk.
Second, the solution features an overhead reader, an emerging trend in the RFID industry. According to our report on overhead readers for the March/April issue of RFID Journal's digital magazine, RFID providers and systems integrators believe these devices will play an important role in RFID solutions. Motorola does not currently offer an overhead reader, though it might have one in the product pipeline.
Zebra is in a good position to become dominant in the automatic identification market. I believe it has made a great move in purchasing the Motorola enterprise division. If it plays its cards right, it will ride the coming RFID wave and shareholders will be handsomely rewarded.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.
