Motorola faces challenge with Symbol, says Gartner

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Motorola’s purchase of Symbol, which it bought last month for US$3.9 billion (see IT Weekly, 23-29 September 2006) has the potential to be beneficial in the long term, but could prove challenging in the short term, claims analyst firm Gartner.

“Pairing Motorola’s Enterprise group with Symbol’s experience in ‘rugged’ handheld devices, wireless local area networks (WLANs), data capture, radio frequency identification (RFID) and industry-specific application expertise makes sense on paper,” Gartner analysts said in an advisory note.

“[The] move will provide Motorola with intellectual property, new direct-sales and distribution channels, and an installed customer base that is adjacent to its core enterprise strength in government.

For Symbol, [the] deal offers strong financial backing, complementary intellectual property and supply chain know-how,” the analysts stated.

Other benefits to the acquisition, they said, were that it offered Motorola’s enterprise group the potential to have a group independent of the mobile device segment, and that it would make it more difficult for Motorola’s chief competitors to predict its moves.

But Gartner added a cautionary note that the Symbol portfolio will not prove straightforward to integrate which could prove a problem given Motorola’s lack of previous experience with major acquisitions.

The mobile phone giant has made a number of smaller acquisitions in the past year or so, but has not previously taken on a purchase as large as Symbol.

“Motorola has been slow to integrate other acquisitions (such as its 2004 mesh networking acquisition),” the firm said, adding “this will be a much more complicated portfolio to integrate and Motorola must balance control with innovation in executing this deal, providing Symbol’s product management with the key design decisions to grow the device and scanner business.”

Gartner predicted that Motorola would retain Symbol’s WLAN infrastructure business so that it could bundle this offering for vertical industries and complement its WiMax and voice offerings.

The deal may even lead to Motorola making other acquisitions as it seeks to strengthen its WLAN capability, Gartner said.

“To remain viable in the WLAN market, Motorola must build its WLAN capability by positioning it as an integrated offering in contrast with other WLAN infrastructure vendors such as Cisco, and by exploring partnerships/acquisitions with the likes of HP’s Procurve Networking and AirDefense,”the note concluded.

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