Motorola sees Symbol at heart of goals

Motorola is getting a lot for its $4 billion buyout of Symbol Technologies. But whether that includes a future for what Motorola executives call enterprise mobility remains to be seen.

The acquisition, announced this week, gives Motorola access to a blue-chip list of customers in key vertical markets, where Symbol's diverse product portfolio has been strong. Those products include rugged handheld computers, bar code readers, wireless point-of-sale systems, wireless LAN (WLAN) infrastructure, and more recently RFID readers and tags.

Those products, and their enterprise success, are the fruit of a sustained, muscular R&D effort, which has resulted in 910 U.S. patents and 680 international patents for Symbol. Motorola executives cited the patents as a key attraction.

The deal caps a dramatic turnaround for Symbol, which saw its reputation tarnished by years of losses, mismanagement and scandal. A pack of former top executives were indicted in 2004 for accounting fraud.

"Symbol today is not the Symbol of three years ago," says Abner Germanow, director of enterprise network research for IDC. "Three years ago, it was a financial mess, their support services were a disaster area, and their products were old." Today, he says, the company is profitable, the support services are world class and the product lines have been refreshed.

Symbol in its most recent fiscal year reported revenue of $1.77 billion, virtually flat compared with the $1.73 billion in fiscal 2004. Profits were hit hard: $32.2 million, down from $81.8 million.

Motorola plans to marry Symbol's expertise in devices, device management and short-range wireless networking, and blend it with Motorola's wide-area technologies, such as mesh networking, two-way radios, cellular networking and soon WiMAX wireless broadband.

"They have an [enterprise] customer list I'd die for," says Motorola Chairman and CEO Ed Zander, speaking at a press conference last week. "We can pitch them, with our [telecom] carrier partners, a total mobility solution across the enterprise."

"We are very bullish on the complementarities and the integration of these technologies," says John DeFeo, corporate vice president for enterprise products in Motorola's Enterprise Mobility Solutions. "This is a vision [of network convergence] that's becoming more and more real every day."

"Symbol embodies all of Motorola's enterprise aspirations," DeFeo says.

But in the short term, those aspirations will yield to more modest and immediately practical aims, IDC's Germanow says. Motorola can bring WAN technology expertise quickly to a wide range of Symbol products, he says.