Symbols Future with RFID Uncertain Under Motorola Umbrella

RFID may disappear for Symbol Technologies, and too, for Motorola. Thats the whisper among industry experts speculating over the future of Symbols radio frequency technology in the wake of Motorolas bid to acquire the company.

Motorola announced Sept. 19 that it would acquire Symbol for about $3.9 billion.

While there are several schools of thought among industry experts, the bottom line seems to be that either Motorola will continue down the path of RFID with Symbols technology—an area Motorolas tried making a buck at in the past—or it will opt out.

There are a couple of factors that weigh in.

Symbol, based in Holtsville, N.Y., develops and manufactures whats referred to as enterprise mobility systems that have rugged mobile computing capabilities along with data capture, RFID and wireless functionality.

And while Symbol has made a name for itself in the burgeoning RFID market—particularly in pilot projects, where the companys products are reported to be widely used—RFID is not the companys core competency.

Resource Library:

In fact, Symbol acquired RFID technology a couple years back to get in the game.

Motorola is looking to expand its core consumer wireless systems—things like digital video set tops and cell phones—to include the enterprise market.

Symbol, which boasts a fairly impressive customer list, brings inroads to the enterprise channel.

But what it doesnt bring is a profitable RFID business. During the companys latest earnings call, officials pointed out that RFID revenue for the quarter were "immaterial."

Thats not to say Symbol hasnt made inroads with RFID—its a well-known name in the industry as a provider of RFID readers, tags, antennas and inlays.

But the company is well-known in other market sectors as well, including bar code equipment, wireless and mobile solutions, particularly in the retail sector. Those latter areas could be where Motorolas key interests lie as it moves closer to the enterprise sector.

Couple that with the fact that RFID has not seen the explosive growth some analysts have expected, and its hard to say if Motorola will have a future with RFID.

"I think [RFID] is going to be a challenge for Motorola because both companies had RFID efforts going on," said Mirabel Lopez, vice president of research at Forrester, in Cambridge, Mass.

"Its an emerging market where there are still a lot of questions about how quickly and how deep its moving. And there are still a lot of regulatory issues around RFID."

Lopez points out that Symbol had been doing a lot to streamline management in RFID, and perhaps integrating that with its wireless business. The question is: How does Motorola view that activity?

Industry watchers differ in their opinion. ABI Research, which keeps a close eye on the RFID market, is on the fence about whether Symbol can help reinvigorate Motorolas longstanding efforts with RFID.

In the late 1990s, Motorola developed something called BiStatix, an active RFID printed technology antenna. After deciding there was no market for the technology, it shuttered BiStatixs doors in 2001.

International alliance to study RFID, wireless security. Click here to read more.

More recently the company has done some RFID hardware development and looked at different solution sets for vertical markets, but to no great avail, according to Michael Liard, ABI Researchs practice director for RFID and Contactless.

"The key theme here is the combining of two very large players in wireless, and RFID is just another complementary technology brought to the table," said Liard, in Oyster Bay, N.Y.

"Symbol could help reinvigorate [Motorolas efforts] around RFID—or not. But I dont think they are going to abandon it."

Reik Read, an analyst with Baird, wrote in a research note that he believes Symbol is a good fit for Motorola, in part because of its capabilities with radio frequency technology.

"RFID is coming. Symbol is in a key position in RFID as the companys XR400 is well regarded and the company has a strong position in the retail market," wrote Read, based in Milwaukee, Wis.

"We would not be surprised to see Wal-Mart place a reader order with Symbol following what appears to be a period of additional evaluation by the RFID leader in retail."

Check out eWEEK.coms for the latest news, reviews and analysis on mobile and wireless computing.