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9/22/2006
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Motorola Sleek Meets Symbol Rugged In $3.9B Buyout

Some customers see the acquisition as a marriage made in heaven.

Motorola is best known for its sleek cell phones, but it sees specialized mobile technology as an inroad to becoming a more valued business IT supplier. The company last week plunked down $3.9 billion to get there, agreeing to acquire Symbol Technologies, a maker of rugged handheld devices, RFID systems, and wireless network switches and access points.

Symbol gets Motorola into accounts in industries such as health care, manufacturing, and retail and gives it access to some 12,000 partners in software development and sales distribution. Symbol customers include Boeing, Lockheed Martin, Wal-Mart, and Walt Disney. The acquisition is scheduled to close by early next year.

Mobile Yin-Yang
Motorola
brings to the marriage super-slim cell phones, Bluetooth technologies, and expertise it's developing in WiMax networks

motorolla
Symbol
offers handheld devices for capturing data from manufacturing, hospitals and mobile point-of-sale systems

symbol


Motorola isn't talking about any potential new products to come from the acquisition, but some are calling it a sensible marriage. "With Symbol's expertise in enterprise mobility and Motorola's innovation in consumer-class mobile devices, we could see some really great lightweight products that meet our needs," says Oliver Tsai, director of IT at Sunnybrook Health Sciences Centre, a Toronto hospital that uses Symbol's computer on wheels, handheld devices, wireless network infrastructure, and management software. Rugged handhelds used by Sunnybrook clinicians, such as the Symbol MC50 and MC70, are too bulky for mobile workers, Tsai says.

Motorola, which paid $15 per share for Symbol stock, could prove a savior for the company. Symbol's stock has traded as low as $8 a share in the past year; it had in recent years suffered through an accounting fraud scandal, resulting in guilty pleas by former executives and a hefty Securities and Exchange Commission settlement. It also has been party to intellectual property battles with rival Intermec Technologies.

Symbol's technologies will make it easier for Motorola to pitch its products and services straight to IT managers instead of through wireless carriers and service providers, the standard model for getting cell phones and smart phones into businesses. Symbol also sells a wireless intrusion-prevention system, bar code scanners, payment systems, bridges, and adapters that extend wireless connectivity to mobile handhelds.

Beyond Cell Phones

Motorola, maker of the popular Moto Razr cell phone and the Moto Q smart phone for business pros, is the world's second largest cell phone supplier, after Nokia. Several months ago it created a networks and enterprise division, but as an IT supplier its success mostly has been limited to government and public safety organizations for two-way radios, cellular gateways, and wireless broadband systems. Motorola recently secured a contract to provide Sprint Nextel with base stations and access points for a planned mobile WiMax network and has WiMax deployments in the works in Tokyo and Pakistan.

Motorola's been trying to build its business market presence for months. In July, it expanded its Motopro Mobility Suite, a development framework for wireless applications, with tools that let developers create software for wireless searches on Google Search Appliances. It also created CanvasM, a company to develop custom wireless business applications and help businesses implement apps and related services. "Businesses today don't have a trusted name that pops into their head when they think about who to turn to for forming a strategy around mobility, and how to deploy and manage the explosion of the mobile workforce," says John DeFeo, corporate VP of Motorola enterprise products. "We will become that company."

DeFeo makes a good point: Cell phone makers have focused on consumer markets. The market for business mobile technologies is made up of a variety of vendors, and there's no clear leader. Yet Motorola acknowledges it will be a year before it can integrate Symbol and best demonstrate what the two will collectively offer businesses.

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