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Two Potential Gorillas Emerge

Consolidation has left Honeywell and Motorola Solutions the two dominant players in the automatic-identification market.
By Mark Roberti
Oct 14, 2013

Last month, the U.S. Federal Trade Commission (FTC) approved—after more than nine months of deliberation—Honeywell International's $600 million acquisition of Intermec Technologies, a provider of bar-code scanners and radio frequency identification readers. The FTC's one stipulation was that Honeywell would have to license its patents related to scanning two-dimensional bar codes to Datalogic, an Italian bar-code technology provider, for 12 years. The FTC said licensing the patents would enable Datalogic to enter the U.S. market and "restore the competition lost due to the merger."

The acquisition of Intermec sets Honeywell up as the only serious rival to Motorola Solutions in the automatic-identification market. For the past seven years, Honeywell and Motorola have been gobbling up smaller auto-ID companies, which have made some acquisitions of their own.

Honeywell is a $37 billion conglomerate, based in Morristown, N.J. The company got its start in 1885 with the invention of the damper flapper, a thermostat for coal furnaces. Today, Honeywell is best known for its home thermostats, but it also has aerospace and defense, automotive, construction and maintenance, energy, health care, industrial process control, and safety and security divisions. Intermec will become part of the Honeywell Scanning & Mobility division, and it will likely take six months to a year to complete the integration.

Honeywell jumped into the market for bar-code scanners in 2007, when it acquired Hand Held Products. A year later, it acquired Metrologic Instruments, a supplier of data-capture hardware, for $720 million. At the time, Metrologic had $240 million in sales, but the two acquisitions set Honeywell up as a legitimate rival to Motorola. In 2011, Honeywell purchased EMS Technologies for $491 million. EMS offered wireless solutions for mobile networking, rugged mobile computers and satellite communications. It also had an RFID business and owned LXE, which made vehicle-mounted terminals and passive ultrahigh-frequency RFID readers.

Intermec made a few of its own acquisitions. In 1997, it purchased Norand and United Barcode Industries. That year, it also acquired passive UHF RFID patents from IBM. And a year later, Intermec acquired Amtech Corporation's high-frequency RFID business, Amtech Transportation Systems.

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