VDC Research: RFID, Barcode, Retail Automation & Self-Service Market Blog

New Research: Disruption Ahead in the Handheld Barcode Scanner Market

VDC is pleased to announce the publication of its annual study of the handheld barcode scanner market.  This research is an invaluable strategic and tactical planning tool for barcode scanner vendors and their channel partners.  Highlights of the research include:

• Forecasted revenue CAGR of 5.2% for the global market through 2017 disguises significant turmoil below the surface, for vendors, the channel and end-users.

• As 2013 nears its end, vendors are reporting slowing refresh cycles and a challenging climate outside of new, non-traditional growth markets – such as healthcare – where large investments in sales and marketing are required to win new accounts.
• The decline of laser-based scanning will accelerate over time, with a corresponding acceleration of the imager-based scanning market.
• Low cost Asian vendors will continue to steal share from the large established American and European vendors such as Motorola Solutions, Honeywell and Datalogic.
• End-user interest in the use of consumer devices for scanning is widespread, intense, and growing, posing a real opportunity for mobile device vendors and a real threat to scanner vendors focused on retail and hospitality.

To learn more, download the Executive Brief now.
(Above links to landing page with similar content. Registration required to get to e-brief.)

Revisiting Our Annual Barcode Predictions with One Quarter Remaining in 2013

With three quarters of 2013 already behind us, the VDC AutoID team thought it would be interesting to revisit the 2013 predictions we made at the start of the year. In this blog post we examine our barcode predictions and offer an update as we head into the final stretch of 2013.    

Prediction #1:

More barcode market aggregation ahead – Expect continued consolidation of the barcode hardware landscape, particularly to achieve growth across product categories, verticals and regions.

Update:  It may not even be over but 2013 will be remembered as another year in which we witnessed a large amount of vendor consolidation. The major acquisition of Intermec by Honeywell will likely be the big story of 2013. That transaction's impact and significance dwarfs all other M&A activities announced to date and more than likely any others that may be completed before year’s end.  Somewhat surprising, however, is that our prediction proved true before the Honeywell/Intermec deal closed as at least five acquisitions were announced by the end of May.

M&A announcements of note during the first three quarters in the barcode market include:

• Honeywell completed the acquisition of Intermec after receiving final FTC approval, adding new or augmenting existing solutions in voice, barcode printing, RFID and mobile computing (September).
• OCR Canada acquired Aurora Bar Code Technologies Ltd. in order to increase its presence in Western Canada and expand its enterprise mobile computers, barcode scanner, RFID and wireless network capabilities (May).
• Barcoding Inc bought Miles Technologies Inc. for an undisclosed amount in a move to increase its presence in the central US (May).
• General Data Company, a leading manufacturer and provider of barcode identification, tracking and data management products and solutions sought to expand its healthcare solutions offerings and acquired Triangle Biomedical Sciences Inc. (TBS), a leading manufacturer and supplier of instrumentation, reagents and consumables for the clinical and research pathology market (May).
• Datamax-O’Neil acquired the thermal printer assets of Source Technologies, a leading provider in specialized printing solutions (May).
• Telenor acquired Liquid Barcodes, the largest provider of mobile coupons in Norway, to strengthen its focus on coupons, value codes and loyalty solutions. Along with the company Valuecodes, in which Telenor has a controlling 51% stake, Telenor will become the leading mobile coupon player in Norway and have a strong foundation for further expansion (March).

Prediction #2:

Barcode vendors will learn to “accessorize” – More barcode hardware players will actively look to enter [or further entrench themselves in] the “accessories” market – developing sleds and/or sleeves with barcode scanner,  payment acceptance or other features that support consumer-grade device usage in retail, healthcare and enterprise environments.

Update: Starting with a large number of vendor products announced and on display at NRF, it was clear in January that “accessorizing with AutoID” was central to many product development strategies. Buoyed by the expanding BYOD trend and focus on lowering total cost of ownership (TCO), several vendors such as Griffin Technology and Honeywell have released new sleeves and sleds suited for enterprise, retail and/or healthcare environments.  

Prediction #3

Future with mobility, not without in [barcode label generation software] market – An increasing number of barcode printing software providers will extend label printing support to portable devices (both purpose-built and consumer-grade) – facilitating mobile applications such as field sales, field service and direct store delivery (DSD).

Update: We give ourselves partial credit on this prediction as the products and capabilities to support mobile printing are available, however, end-user usage of mobile print commands managed and sent from consumer devices remains in the nascent stage. At this point in the year, most barcode label generation software and barcode printer vendors have announced support (i.e., drivers, firmware) for leading mobile operating systems such as iOS and Android.  In our 2013 conversations so far, remote print management and mobile device support remain key software development areas. In fact, expect a leading barcode label generation software vendor to announce enhanced mobile device support as part of a major new product launch in early October.

Prediction #4:

Embracing the tech-savvy consumer – Scanning with and displaying barcodes on mobile device screens will continue to grow significantly among consumers. We predict more QSRs (quick service restaurants), convenience stores, restaurants, theme parks/ entertainment venues and other consumer-facing enterprises will invest in and deploy barcode imagers and consumer-grade mobile devices to interact with consumers (e.g., coupon redemption, payment, loyalty/rewards programs).

Update: This prediction was likely going to come true; however, the quick pace of adoption and strategy migration has taken vendors (and us) by surprise. For example, 2D imager adoption remains strong through three quarters with growth outpacing all other barcode product categories, especially in retail sectors. Providing examples of business strategies focused on targeting and serving  consumers armed with smartphones are supermarket chain Giant and Stop and Shop, drugstore chain CVS, and Australia’s eRX to name a few. In addition, according to their Q2 2013 Trend Report, ScanLife processed over 7 million scans in consecutive months for the first time ever, users tend to scan over 3x per month on average (a 22% increase from a year ago) and scanning from tablets has increased by a whopping 1300% from Q2 2012.

Revisiting Our Annual RFID &RTLS Predictions with One Quarter Remaining in 2013

With three quarters of 2013 already behind us, the VDC AutoID team thought it would be interesting to revisit the 2013 predictions we made at the start of the year. In this blog post we examine our RFID &RTLS predictions and offer an update with just three months left.    

Prediction #1:

Vendors – especially RTLS solution providers – will develop the “healthcare stare” – The use of RFID and RTLS is on the rise in healthcare, most notably in the US thanks to the VA’s announced $540M+ contract to track equipment and supplies at 21 of its Veteran Integrated Service Networks (VISNs)…This spark to the market (and sizeable contract) drew a lot of attention in 2012 and we expect the RFID and RTLS frenzy to continue in healthcare in 2013. However, we caution vendors (especially RTLS providers) to not focus solely on healthcare and to seek opportunities and market development in other vertical markets where the competitive field may be less crowded.

Update: This prediction has come true in that healthcare has been the star vertical for AutoID in 2013, but those with a healthcare-centric focus are actively seeking opportunities in other verticals. Successful, high-profile applications for RFID and RTLS in healthcare include asset management, sample tracking, temperature control in sample fridges and hygiene control. While there is strong growth to be realized in healthcare, the sector is challenge with long sales cycles and tight IT budgets. Over the last nine months I have fielded several inquiries about how to target and penetrate this emerging vertical – from both non-RFID/RTLS solution providers and larger consultancies looking for expansion opportunities. Perhaps more interesting is that I have also had a fair number of exchanges with healthcare-centric RFID and RTLS solution providers seeking market opportunities where their products and services may be leveraged outside of healthcare (i.e., industrial, retail enterprises).  

Prediction #2:

Passive UHF EPC item-level tagging (ILT) in the apparel sector will pick up the pace after a somewhat slow 2012 – This past year was a mild disappointment in terms of retailer deployment of RFID for ILT of apparel. For example, no major reader or printer/encoder orders were delivered, several large retailers remain behind originally announced plans (e.g., Wal-Mart, JC Penney) and some newer programs were pushed to or will start in 2013.  So what to expect in the year ahead? Even more American Apparel stores will go live with RFID (a bright spot for 2012 as well), Wal-Mart will reassess its RFID plans but remain committed, Macy’s will make its anticipated move, JC Penney has bigger worries than RFID, international retailer Zara will play a key role in increasing tag volumes and RFID EAS will become a more critical part of the ILT in apparel conversation.

Update: Retail continues to take strides in advancing item level tagging on a global scale. Numerous companies such as Mersmann and Borsheims are using RFID for solutions against theft of high-priced goods. Kohl’s, on the other hand, is implementing a full item level tagging solution that includes non-apparel items. The successes of many pilot programs have proven the value of RFID in retail and new retailers are joining the fray as a result. The number of RFID-enabled stores and annual tag volumes among existing users are rapidly expanding. RFID EAS solutions are under broader investigation this year as tagging techniques and the cost of tagging comes down.      

Prediction #3:

Embedded RFID keeps the forward momentum – At the end of 2011 we noted the rise of “RFID inside,” or embedded RFID, as a key trend to watch for in 2012.  We are keeping it on the list in 2013 after seeing a great deal of progress in 2012. With price points declining and form factors shrinking, we expect to see solutions and applications such as these expand and new innovations to be introduced in 2013.

Update: As the capability and power of RFID expands, RFID tags are producible thinner than paper, so does the ability to embed. Uses have sprung up for video games, clothing personalization, and even fiber composites. In addition, reader chipset shipments to support embedded RFID applications have grown sharply over the last two years, with 2013 volumes for embedded chipsets likely to outpace those for dedicated, finished readers. Reader module vendors such as ThingMagic continue to innovate and develop new solutions such as RFID-enabling consumer devices such as tablets. Embedded RFID seems to be the future of RFID usage.

Prediction #4:

Honeywell Scanning & Mobility will get strategic on RFID – and quickly – after announcing its first RFID product and the acquisition of Intermec in 2012 – After some exploration of RFID while acquiring several barcode scanner and mobile computing companies over the last few years, Honeywell made some eye-catching RFID moves in 2012. They made a subtle move in introducing an RFID reader and then made a major move in announcing the acquisition of Intermec (a major RFID IP holder and RFID equipment manufacturer). We predict Honeywell will aggressively develop its RFID strategy in 2013, becoming a strong competitor in select verticals and applications that play to the combined strengths of Honeywell and Intermec.  What’s next for Honeywell – RTLS in 2013 or 2014?

Update: Although the EU had approved the acquisition in 2012, the progress had been slow moving through much of 2013 due to challenges by the FTC. In mid-September the acquisition was approved after a decision by the FTC around 2D image engine competition. With the elongated inquiry period, Honeywell’s RFID strategy remains to be seen and we may gain some insight before the year ends. VDC will keep a close eye on the process of integrating Intermec, especially Intermec’s RFID business (and IP portfolio). It may be far too soon to look ahead, but if Honeywell’s vision is to become the true, sole total AutoID solutions provider, then they would need to think about adding RTLS to the mix in my opinion. I am sure, however, that Honeywell is much more focused on making Intermec part of their operations and determining their strategies for new-to-them solutions like thermal barcode printing before they would consider pursuing another new technology such as RTLS.

New AutoID Coverage from VDC: Announcing our Machine Vision Solutions Research Program

After several months of investigation and early market analysis conducted by our AutoID team, VDC Research Group is pleased to announce the launch of our 2014 Machine Vision Solutions Market Research Program. This new research is a natural fit with our legacy coverage of core AutoID technologies such as barcode scanners and imagers, RFID and RTLS as well as our on-going analysis within industrial automation and sensors sectors. VDC’s machine vision program will help AutoID vendors, industrial automation equipment suppliers and machine vision specialists understand the key trends, issues and drivers shaping the machine vision market in industrial and non-industrial sectors. 

Machine vision components and systems sales have emerged as a multi-billion dollar global market opportunity. At its core machine vision is the process of applying a range of technologies and methods to provide imaging-based automatic inspection, process control, robot guidance and much more. As these solutions become a more critical part of automating business processes and operations across industries, we expect broader end-user adoption and market growth in both manufacturing and non-manufacturing sectors.

The research program influencer period is now open for vendors and solutions providers.  Research program influencers help shape our upcoming machine vision market coverage, segmentations, analysis and more. Please contact VDC for more information about becoming a research influencer and gain early access to machine vision insights from our AutoID team. We can be reached at: i[email protected]

Key research program components include the following:

• Track 1: VDC Views: on machine vision solution selection & deployment

• Track 2: Machine Vision Market Analysis reports for:

-    Industrial/Manufacturing Sectors

-    Emerging Markets/Verticals

• Track 3: Vendor Spotlights & Evaluation Guide
• Track 4: Machine Vision End-user Analysis report

 What are some of the key questions answered by this research program?

• Where are the growth centers for machine vision components and solutions in terms of industry sectors, applications and regions?
• Which vendors and solutions providers are leading the machine vision market today? Which companies are considered innovators shaping the future direction of the machine vision landscape?
• Which types of enterprises most frequently deploy machine vision solutions and why?
• How will vendors differentiate themselves from their peers in the highly-fragmented, highly-competitive machine vision market?
• In which environments are the relatively less complex smart camera-based machine vision systems a significant threat to PC-based solutions?

 3M Narrows Passive UHF RFID Application Focus to AVI, EVR and ITS

In September of 2012, 3M acquired Federal Signals Technologies (FSTech) from Federal Signal Corporations. FSTech competed in electronic toll collection (ETC) and automatic vehicle identification (AVI) markets through its subsidiary Sirit, a passive UHF solutions provider specializing in readers. With the acquisition, 3M aimed to increase its overall RFID presence, augmenting its strong position in the high frequency (HF)-focused e-ID (i.e., e-passport) market. Sirit’s high-performance readers were also being used by customers in supply chain environments for work-in-process, asset management, item-level and other applications.

In a letter addressing 3M customers, the company announced the narrowing of their RFID practice to eliminate supply chain technology production and focus exclusively on parking and tolling applications in the transportation market, including Automated Vehicle Identification (AVI), Electronic Vehicle Registration (EVR), and Intelligent Transportation Systems (ITS) applications. Sirit, which leveraged reader technology from peers such as Motorola, was no longer a competitor in industrial sectors.  

The timing of this announcement was interesting because it was weeks before a patent lawsuit was settled between Neology (a subsidiary of SMARTRAC) and 3M over ISO 18000-6C technology made by Sirit (acquired by 3M as part of the September 2012 deal with FSTech). The settlement allows SMARTRAC, Neology, and 3M access to the others’ RFID technology in the transportation market and includes an undisclosed payment by 3M.

18000-6C technology is the hottest new technology in the automatic tolling and electronic vehicle registration (EVR) sectors because of its long range, lower costs and high performance versus alternative solutions. However, deployments to date have been largely limited to new installations where toll roads and existing infrastructure are not present (i.e., Brazil).

SML Group Acquires Software Provider Xterprise

Many experts in the RFID space have been expecting intense consolidation in the space for some time, but to no avail. We have seen pockets of activity over the years, but not enough to significantly impact the competitive landscape and value chain. In the past, I have referred to the RFID software space as one area where hardware manufacturers and solutions providers could augment and enhance their RFID offerings and value add to customers and partners, especially in key verticals.  It appears that SML Group, an apparel branding and packaging group based in China, agrees with me.

SML announced that they have acquired the majority share of Xterprise, an RFID software solution company based in Texas. Xterprise is an experienced leader in the RFID retail supply chain space, with American Apparel serving as a fully-deployed, standout item-level tagging customer. SML has left Xterprises’ operations completely intact, but will now offer Xterprises’ full suite of RFID Clarity solutions in addition to their current packages. Both companies seem excited about the new potential markets allowed by the merger. President of Xterprise, Dean Frew, stated, “We are thrilled to join the SML team and what that will mean to delivering impactful RFID Item-level solutions to customers around the globe.” This acquirement increases SML’s presence and power in the Americas, a key to their global expansion strategy (the majority of their customers are Asian based retail companies) and enables the company to deliver end-to-end solutions throughout the apparel supply chain from the point of manufacture to the retail store floor.  

Recap of VDC's AutoID Team's Q2 Blogs: Did You Miss Any?

If you missed any blog posts from Q2, here is a recap, including hyperlinks and core AutoID technology focus for each posting. 

A Preview of our Handheld Barcode Scanner Report

AutoID Focus: Barcode

The recent trends in the barcode industry continued in 2012. What is the state of the handheld barcode market? This article looks at the state of the barcode industry and provides insight into key trends and competitive dynamics for the handheld scanner market.

Cognex watching Microscan’s products like a “Hawk”; files IP infringement claim

AutoID Focus: Barcode

In April, Cognex filed a lawsuit against competitor Microscan’s Mobile Hawk product for patent infringement: Microscan is refuting the claim of infringement alleging it is original technology.   

How does Legislation Impact Barcode Technology Adoption?

AutoID Focus: Barcode 

Many governments have looked towards barcode technology to enhance traceability of highly counterfeited products (pharmaceuticals, food, etc.). Legislation usually takes time for implementation, however. How does legislation impact barcode adoption?  

Embedded Sensing & M2M Enable Advanced Efficient Agriculture with RFID

AutoID Focus: RFID

A new product from RFMicron, the Magnus chip, allows for upgrades in typical passive RFID technology. These upgrades enhance performance and adjust performance for given levels of moisture. One particular industry this could help is agriculture. Learn more by reading this post.

What is Shaking Up the Barcode Technology Market?

AutoID Focus: Barcode

2012 was interesting year for many markets, including the barcode market. Beyond economic stagnation and volatility, there are three other factors that contributed to the performance in the barcode technology market.

TEKLYNX International Partners with VDC Research on Recent Channel Leadership Workshops

AutoID Focus: Barcode

In mid May, TEKLYNX partnered with VDC, CEO Focus, and Felton Consulting, to present two separate channel leadership workshops. These workshops offered a valuable opportunity for executive-to-executive interactions. Well over 100 attendees participated in the two live events.

Is this the end of barcode labels as we know it?

AutoID Focus: Barcode

Many technologies are changing the traditional look of black and white barcodes. Two such relevant technologies are colored barcodes and watermarks (invisible barcodes). Do these technologies prove to be the demise for barcodes or are they merely complements?

The Power of Datalogic's Magellan 9800i - Now Available

AutoID Focus: Barcode

Growth in the barcode industry has continued, anchored by the need for camera based imagers. Datalogic, this June, released a game changer for the retail industry in the multi-plane camera based scanner-scale, the Magellan 9800i, specifically for checkout.

What You See is Just Not What You Eat Anymore

AutoID Focus: Barcode

In China, many wealthy people have looked towards international sources for their cuisine. Why? Because there have been several counterfeiting scandals over the past few years. Barcode and other AutoID technology can bring asset tracking capabilities to China.

VDC's AutoID & Data Capture Practice's Summer Intern Gets Enamored by RFID

AutoID Focus: RFID

Several factors of everyday life are often misunderstood or generally ignored. VDC’s AutoID & Data Capture Practice's summer intern’s baptism into the world of AutoID, especially RFID, was eye opening and empowering. 

The Magic of Macy’s Omni-Channel Retailing Strategy Becoming More Potent with RFID

AutoID Focus: RFID

Omni-channel retail is an ideal in which all channels of a retailer are seamlessly integrated such that information is shared in real time. Macy’s has implemented RFID at the item-level for apparel and moving toward tagging other items with the goal of enabling omni-channel retailing.

The RFID Application Invasion Marches on

AutoID Focus: RFID

Friedrich Dick (a German cutlery company), Fleye (an action sports filming company), and the government of Taipei are all using RFID in creative ways. As RFID becomes more affordable and accessible, a higher number of companies and organizations are looking to implement RFID as solutions.

DC Velocity Talks Item-Level RFID and Distribution Centers with VDC’s Mike Liard

AutoID Focus: RFID

DC Velocity magazine sought thought leadership from several RFID experts on the impact that item-level RFID tagging will have on distribution centers. Mike Liard, of VDC, helped DC Velocity on both an article and a webcast concerning this issue.

TEKLYNX International Partners with VDC Research on Recent Channel Leadership Workshops

TEKLYNX International recently conducted two live exclusive workshops for resellers, partnering
with VDC Research Group, CEO Focus and Felton Consulting for the events. The virtual workshops were designed for executive-to-executive dialogue on topics to help better position TEKLYNX’s reseller partners and their AIDC business for continued growth and success. These workshops also served as a fitting platform for TEKLYNX to unveil its new Strategic Partner Program.

Thefirst live “Channel Leadership: Fast Lane to Success” workshop was held Thursday, May 16^th and drewover 85 attendees. It was an outstanding turnout and a highly successful event.  And, due to a high level of demand, TEKLYNX invested in a second workshop that took place Wednesday, May 22^nd that netted roughly 40 attendees.    

Through the workshop attendees engaged in discussions around:

- The past, present and future of the AIDC industry – to ensure attendees’ businesses align with future AIDC customer/user trends to avoid falling behind.

- Best-in-class business strategies and processes.

- Tools to leverage to grow, track and manage resellers’ businesses.

- Tips to stay competitive and relevant through the right product mix, competencies and partners.

VDC Research was very excited to be a part of this workshop to discuss how the AIDC market has evolved in terms of product development as well as end user adoption and reseller evolution. First, VDC took a look at end user AIDC product adoption trends. We then walked attendees through reseller trends and market dynamics – past, present and future.

During the workshops, the best way for us to depict the evolution of the AIDC market was through a bell curve, starting with the early innovators and moving through to new innovation. In the book Crossing the Chasm, the author proposes a “Technology Adoption Lifecycle,” represented by a bell-shaped curve which describes the chronology of when companies adopt technologies. Our curve was an adaptation and was shaped to reflect key points in time against user demand and end user classification types spanning the innovators in the 1970s through various end user adoption groups to the new innovation or innovators being seen today and in the future. We repeated the bell curve exercise for the reseller community, highlighting key moments in the storied history of AIDC.

The importance was to communicate how end user needs have changed with their demand over time and how those needs have impacted AIDC market and solution development, especially among the reseller community.   

Attendee feedback was extremely positive and stellar questions were posed throughout the workshops.

A special thank you to Laura Henderson, General Manager at TEKLYNX, and her highly dedicated team for inviting VDC Research to participate in and contribute to both workshops.

If you were unable to attend either workshop, please contact the TEKLYNX Partner Manager at 414-837-4768 for more information.

Barcode Technology Innovations Coming to the Forefront Early in 2013 – Part 2

In Part 1, I highlighted some new product announcements from the barcode scanner vendor community and what these mean for the competitive landscape in general. Here in this post, I will focus on innovations in the barcode printer marketplace and how vendors are positioning their portfolio for success in today’s challenging global macroeconomic environment. Vendors’ research and development efforts are not limited to any one form factor, as evidenced by these product introductions.

1. Zebra Technologies: As the undisputed market leader in the barcode printer landscape, Zebra has successfully leveraged its extensive resources to build out a formidable product line that addresses current and emerging market requirements across a wide range of vertical markets and installation environments. The Company is working to expand its presence in emerging country markets with ongoing investments toward expanding its product portfolio. Zebra launched two MFi (Made For iPhone) certified printers to its already extensive mobile printer offerings – iMZ220™ and iMZ320™ – designed to support printing applications including receipts, tickets, proof of delivery and invoices. Aside from iOS, these solutions are fully capable of also supporting other leading mobile device platforms including Android™, Windows® Mobile and Blackberry OS. In VDC’s opinion, this move will help the organization maintain and also strengthen its leadership position in the portable thermal printer market while also enabling printing support for increasingly popular consumer handhelds.

2. SATO: The market leader in Asia-Pacific, SATO has a much smaller presence in other regions. With its acquisition of Argox in 2011, the Company aims to successfully penetrate the existing low-cost market opportunity in Latin America and Asia-Pacific, with a product line that effectively challenges emerging competitors such as TSC Printers. SATO America recently announced the launch of their Value Line of printers designed to fulfill application requirements of emerging and industrial markets. This includes CP-2140Z, the OS Series and the X Series of printers, capable of supporting applications in industries ranging from retail and transportation to health care and hospitality. The Value Line products are particularly aimed at price-sensitive users looking for cost-effective investment options.

3. Printronix: With a strong focus on the stationary industrial thermal barcode printer market, Printronix continues to work on building out its channel and vertical market reach with strategic alliances and new product introductions. The company’s printers support high-volume, mission critical barcode labeling applications in the industrial market. Printronix rolled out the entry-level T2N series of thermal barcode printers in the first quarter of 2013, pricing it aggressively at below $1,000 for the 203 dpi model. These printers are targeted at application environments including distribution, logistics, manufacturing, retail and health care.

2013 has got off to a very impressive start in terms of product innovation for the barcode technology market. While vendors strive to stay ahead of their competition with these new product introductions, the true winners here are the enterprise end users who are being afforded more choice and options.

Dissecting Honeywell’s Intermec Acquisition: The Potential Road Ahead

Yes, it has been a few weeks since Honeywell announced that it had signed a definitive agreement to acquire Intermec. While this continues to be subject to regulatory approvals, in this blog post I share some thoughts on how this deal may shape up and impact the barcode vendor landscape. Intermec is an active participant in two barcode technology hardware markets – Barcode Printers and Handheld Barcode Scanners. The company has a relatively small presence in the barcode scanning market, with a recent entry into the general purpose scanner space. However, in this category Intermec is up against industry behemoths including Motorola Solutions, Datalogic and Honeywell. I expect Honeywell to fully integrate this part of Intermec’s business into their own; especially given how closely aligned it is with one of Honeywell’s core AIDC competencies. Barcode printing is, however, a whole other conversation.

Intermec is one of the leading barcode printer vendors, according to our research. They rank 5th in our global vendor share chart and are considered to be among the most innovative and resilient brands in the space. Intermec has, over the past 12-18 months, introduced several new barcode printers to the market across all form factors – desktop, industrial and portable. Backed by its strong IP in the space, the organization is well-respected and has a strong presence in each of the regional markets. Is this a business that Honeywell has experience in and is entirely comfortable with? Now this is pure speculation, but I would think not. In my opinion, Intermec’s real value for Honeywell lies in its following areas of expertise – rugged mobile devices, voice technology, barcode scanners and RFID. The barcode printing and media/consumables business is quite possibly one that Honeywell would look to sell to a suitable candidate with an inherent knowledge of this fragmented market and its competitive dynamics, particularly as this doesn’t necessarily fit in with Honeywell’s growth strategy.

To determine the likely contenders vying for Intermec’s barcode printer and consumables business is challenging, but here are my two top picks:

1. ZEBRA TECHNOLOGIES – the undisputed global leader in the barcode printing market. Zebra has a long history of innovation, credibility and dominance in this space. By acquiring this part of Intermec’s broad product portfolio, the company would gain considerable share in each of the regional markets while also successfully leveraging Intermec’s significant presence in the Manufacturing and Transportation & Logistics verticals. Intermec’s strong printer consumables sales would only work to sweeten the pot.
2. SATO CORPORATION – barcode printer market leader in Asia-Pacific, with a much smaller presence in other regions. SATO is a billion-dollar AIDC organization with a business model that is a little different from that of its competitors – a much heavier contribution of consumables sales to overall revenues as opposed to hardware. SATO could significantly benefit from Intermec’s strong barcode printer sales into the Americas and Europe, growing its market presence and share in these regions via a single acquisition.

While it is all pure speculation at this time, I will certainly be keeping an ear out for any such market developments. Stay tuned.

(You can read my other post on this acquisition here)