Motorola's Vertical Leap
09.19.06
Enterprise users are watching with growing anticipation to see what benefits the combination of Motorola Inc. (NYSE: MOT - message board)'s broad cellphone offerings and advanced networking efforts with Symbol Technologies Inc. (NYSE: SBL - message board)'s strong position in scanners, RFID readers, and ruggedized mobile computers might bring.
"It'll be a good thing for Symbol and its customers if they have the stability and the financial backing to continue doing the research and product-development that have made Symbol a successful company on the corporate side," notes Allan Chandler, director of technology at Alameda, Calif.-based Golden State Overnight. (See Shipper Transforms With Wireless.)
The deal, which is expected to close at the end of the year pending SEC and shareholder approval, would also give Motorola a direct line into the enterprise sector, where it's had mixed results. Despite big contracts with the U.S. Postal Service and Federal Express, Motorola's enterprise efforts have not produced the desired results to date.
"We really had our hearts set on adding lots of critical mass and critical size inside the enterprise area," Motorola chairman and CEO Ed Zander said in a conference call, "and today we do that."
While its recently released Razr and Q cell phones help Motorola maintain its hold on the No. 2 position in the consumer mobile phone market, "you can only sell so many MP3-playing cellphones to teenagers till you tap out that market," points out Carmi Levy, senior research analyst at Info-Tech Research Group .
"Clearly, what Motorola wants to do is drive its mobile products more deeply into specific verticals," continues Levy. "They want to go into retail, transportation, and healthcare -- three areas where Symbol has excelled."
In particular, the integration of Symbol's RFID technology with Motorola's broad mobile device offerings and its wireless broadband systems, including Canopy, could open the door to broad-scale enterprise applications heretofore not available from a single vendor.
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