The Symbol - Motorola Deal

September 28, 2006

For those of us who have had a long association with Symbol the takeover of Symbol by Motorola is a sad end to a troubled period that followed a glorious story. It is unclear whether Motorola will keep the Long Island operation going or will transfer everything to Illinois. I share the fear that the latter event will happen at the end.

The big question is whether Motorola paid too little or too much. I side with those who think Motorola paid too much. (Four billion dollars for net annual revenue of about 60 million dollars.) Since I have had no close contact with the company for over four years my comments should be taken with a grain of salt, but here they are.

In my opinion, the most valuable part of the company is the scanner division. There are still several highly competent and talented electro-optical engineers at Symbol. But the strong scanner patents are nearing the end of their life span and the scanner market seems saturated. I expect that part of the business to continue going strong but without major growth. There are accounts in the press about Motorola been attracted to the possibility of adding scanners to cell phones so people could use them for shopping. That does not seem to me that exciting a possibility. I have discussed in the main article why the "portable shopper" is a flawed idea, even if availability of the scanners is restricted to long term customers. Allowing anyone with a scanner equipped cell phone to shop while bypassing check-out is even more far fetched. Other applications of individual scanners (reading internet ads for example) have not been successful either. As a result I doubt that Motorola will see a significant increase in their business because of scanner equipped cell phones.

Some people claim that the "Enterprise Mobility" part of Symbol was what attracted Motorola. I never understood whether "Enterprise Mobility" was a marketing slogan or a technology. I have discussed in the main article the problems of the portable systems division and as far as I can tell nothing has changed.

Of course, Symbol has been a poorly managed company. The inability to make choices amongst alternatives and pursue serious development of a few products rather than half hearted development of several products seems to persist (from what I hear). Motorola may think that by competent management Symbol will show much higher profits. I hope that this is the case, for the sake of all the dedicated and highly capable employees of the company.