September 19, 2006, 8:19 AM — Motorola Inc. plans to acquire wireless mobile device developer Symbol Technologies Inc. for US$3.9 billion, the companies announced Tuesday.
The acquisition will allow Motorola to offer enterprises handheld products that meet the needs of a range of workers, including those in warehouses, manufacturing facilities, offices and out in the field.
Motorola will also be able to offer enterprises products and services that manage and deliver data from end to end.
That's because while Symbol specializes in networks and devices that are used inside buildings, Motorola's focus is on developing equipment for networks that cover areas outside of offices. Combining the two means that Motorola can deliver a unique proposition to enterprises, said Ed Zander, Motorola's chairman and chief executive, speaking during a press conference to discuss the acquisition. He envisions adding cellular and WiMax capabilities to Symbol devices so that they can operate over wide area networks outside of buildings.
Symbol makes a range of devices for businesses, including handheld computers that may include bar code scanners, RFID (radio frequency identification) technologies and Wi-Fi. The company also sells wireless local area networking equipment. The products are widely used by workers in warehouses and large retail outlets, and by delivery services.
Motorola also hopes to take advantage of a strong patent portfolio at Symbol. "Our mouths were watering when we got a look at their IP portfolio," Zander said.
RFID, which enables short-range data transfer, is one area where Symbol has a particularly strong patent position and Zander says Motorola can build on the technology. "When you say RFID most people think of tags but I think way bigger about how you can track assets inside the walls, outside the walls and so on," he said. He envisions combining cellular, Wi-Fi, WiMax and RFID in a way that can help enterprises track products throughout their life cycles.
Motorola is also imagining tapping into Symbol's customer base. "They have a customer list I'd die for," said Zander. "We can go in with some of our carrier partners and pitch a total mobility solution across the enterprise."
Symbol has a strong presence in the retail, wholesale, travel, manufacturing and health-care sectors while Motorola is traditionally strong in government, utilities and transportation.
While Symbol's products have a broad customer base the company has faced hurdles in the past few years. In 2004, the U.S. Securities and Exchange Commission fined Symbol $37 million for fraudulent accounting practices. Eleven executives were charged with securities fraud including the former chief executive, who subsequently fled the U.S.
Rumors had surfaced over the past few days that Symbol was looking for a buyer.
The deal is expected to close later this year or early in 2007, subject to regulatory and other approvals. Symbol will become a Motorola subsidiary and continue to operate from its headquarters in Holtsville, New York. Symbol has 5,000 employees and has deployed 45,000 wireless local area networks and sold 7 million mobile devices, Motorola said.
