Motorola to Broaden Handheld Reader Portfolio With Psion Acquisition

By Claire Swedberg

The $200 million purchase of the handheld computer company opens channels for Motorola's product offerings to meet the needs of industrial and rugged-environment use cases.

Motorola Solutions and Psion have reached an agreement that is expected to result in Motorola's purchase of the British handheld computer manufacturer for $200 million, with closing expected to occur during the fourth quarter of this year. With the acquisition of mobile computer maker Psion, Motorola Solutions will be able to increase its influence in the mobile RFID reader market, which includes end users in warehousing, yard management and industrial environments. Under the terms of the acquisition, Psion's shareholders will receive 88 pence (US$1.36) in cash for each Psion share through the recommended cash offer, valuing Psion's issued ordinary share capital at approximately £129 million (US $200 million).

The acquisition will enable Motorola to further enhance its product portfolio and expand its international reach, says Girish Rishi, Motorola Solutions' corporate VP for enterprise mobile computing. "Most exciting for us, it helps us acquire talent," says Rishi, referring to Psion's technology developers.

Motorola, based in Schaumburg, Ill., provides fixed and handheld ultrahigh-frequency (UHF) RFID readers and reader antennas, as well as RFID industry solutions, to a variety of vertical markets, including retail, asset management and health care. Its handheld devices are used to read EPC Gen 2 passive UHF RFID tags, as well as to scan bar codes within such customer-facing environments as retail stores, health-care facilities and offices, as well as supply chain markets. By contrast, Psion's RFID-enabled handheld and vehicle-mounted devices are commonly employed in the industrial sector, in which rugged functionality is of the utmost importance. Motorola will incorporate Psion's product lines into its own handheld device portfolio.

Psion, formed in 1980, developed some of the earliest mobile computer devices, such as the Psion Organizer. The company is headquartered in London, with much of its operations located in Toronto, Canada. At present, the firm has 830 employees and sells its handheld products to customers in more than 50 countries. Its RFID-enabled products include the Workabout Pro series with UHF, high-frequency (HF) and low-frequency (LF) reader modules, as well as 1-D and 2-D bar-code scanners.

Motorola was already a leading provider of RFID-enabled handheld devices, says Michael Liard, the automatic-identification director at analyst firm VDC Research, but this acquisition will provide the company not only with a wider client base and a larger market share in the RFID sector, but also a larger geographic footprint. Psion maintains a large presence in Europe, while Motorola is most prominent in North America.

The acquisition will enable Motorola to provide additional products combining data-capturing technologies, rather than simply RFID readers—selling devices that act as both a mobile computer and a bar-code scanner, that are Wi-Fi- and GPRS-enabled, and that utilize RFID technology. "It shows us that RFID is less of a silo now," Liard states, "and part of a more holistic solution to business problems."

According to Liard, Motorola's acquisition of Psion is an example of how vendors are responding to the market's needs for auto-ID technologies able to solve problems in multiple ways—solutions that include, but are not isolated to, radio frequency identification. End users currently view RFID as part of a business solution that might include other auto-ID technologies, he adds, "and the business-process change should drive technology solutions."

By broadening its portfolio, Liard says, Motorola will be poised to respond to a wider variety of client needs. "What makes RFID so interesting, and frustrating, is that each user is unique," he states. End users include everything from warehouse managers and oil and gas companies to wine merchants and high-value apparel shops. By acquiring Psion, he contends, Motorola can now better respond to a greater range of use cases.

In addition to the Workabout Pro, Psion's products that support RFID reader modules include the Omnii series of readers, designed for such field-service applications as courier services, trucking and transportation. The company also sells the pocket-size NEO and Ikôn models, which are available with RFID reader modules.

Motorola's existing RFID-enabled products are the MC3190-Z business-class handheld computer, the MC9090-G UHF handheld with bar-code scanning capability, and the MC9090-Z handheld RFID interrogator and bar-code scanner.

Motorola has not yet made any decisions regarding the branding of Psion products. The company's greatest priority, Rishi says, "is to ensure business continues as usual for our joint customers." In the meantime, he explains, Motorola is forming teams to undertake market studies that will help it strategize issues such as staffing and product branding.