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An RFID Partnership Overshadows a Major Acquisition

A complete solution could propel the retail sector toward mass adoption.
By Mark Roberti
Apr 25, 2014

On April 15, Motorola Solutions dropped a bombshell on the radio frequency identification industry. The company announced it is selling its enterprise division, which includes bar codes and RFID solutions, to Zebra Technologies, for $3.45 billion (see Zebra Buys Motorola Solutions' Enterprise Business, Motorola Exits Stage Left and What's Behind the Motorola Deal). The move instantly made Zebra the most significant player in the market for passive ultrahigh-frequency RFID technologies. But as big as that news was, it probably will not have as significant an impact as an announcement that got much less attention. At RFID Journal LIVE!, in early April, Checkpoint Systems and Mojix announced a global partnership to provide retailers with real-time visibility of store inventory (see Checkpoint Partners With Mojix to Offer Passive RTLS in Stores).

Before I explain why the Checkpoint-Mojix partnership is a potentially major event in the RFID industry, let me discuss the Zebra acquisition. Motorola entered the RFID market in a big way in 2006, when it purchased Symbol Technologies for $3.9 billion (see Motorola Acquiring Symbol). At the time, Motorola said it wanted to bolster its enterprise mobility business offerings, part of the company's Networks and Enterprise business unit, through which it offered handheld computers and other rugged mobile devices that enable enterprises to extend network connectivity and computing beyond the office environment. Enterprise mobility was Symbol's core business.

Illustration: iStockphoto
Symbol had purchased an RFID startup called Matrics in 2004, for $230 million (see Symbol Acquires Matrics). RFID was only a small portion of Symbol's overall revenue at the time Motorola acquired it, but Motorola promoted its passive UHF handheld and fixed readers and quickly established itself as the best-known brand in RFID. Motorola split into two companies in January 2011. The smartphone group became Motorola Mobility and was later purchased by Google (Google is now looking to unload the unit). Motorola incorporated its enterprise business and its radio business, which sells communications systems to first-responders and other government agencies.

While executives in the enterprise group were committed to RFID and believed it would be a huge growth sector, senior executives at the firm apparently grew tired of waiting for RFID to deliver the growth everyone forecast years ago. They decided to sell the unit to Zebra because they wanted to concentrate on their government business. Ironically, Motorola is exiting the RFID business just as adoption is gathering momentum.

For Zebra, the acquisition is a game-changer. Last year, the maker of bar-code label printers and RFID printer-encoders reported $1 billion in sales revenue. Motorola's enterprise business division, by contrast, reported approximately $2.5 billion in sales revenue. Zebra employs 2,700 workers worldwide; it will now add 4,500 employees from Motorola.

The acquisition more than doubles Zebra's size, but more important, it makes Zebra a major player in the passive UHF market. Motorola's handhelds and fixed readers nicely complement Zebra's line of printer-encoders. Zebra should experience significant growth as RFID adoption accelerates globally. But the acquisition doesn't guarantee Zebra will dominate the RFID industry. Nor does it advance the adoption of RFID technology.

For RFID adoption to cross the chasm and achieve mass adoption, there needs to be a company or several companies that provide a complete solution. Zebra will offer hardware and some software acquired with the purchase of Motorola's enterprise division. But it doesn't have a complete solution for any single industry.

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