RFID
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VDC: Honeywell likely to sell Intermec’s barcode printing business

Honeywell continues keep quiet about its bid to acquire Intermec. Honeywell offered $603 million for Intermec back in December. The merger is currently in the regulatory approval stage and is expected to close by the end of Q2.

There has been much speculation about the direction that Honeywell will take with the Intermec. Will it keep the revered Intermec brand name, or fold everything in under the Honeywell brand?

Will it sell off some of Intermec’s businesses, particularly its barcode printing business? One certainty is that the pending acquisition makes Honeywell a major player in the RFID business overnight. Up until the deal was announced, Honeywell had just two RFID products. The company didn’t enter the RFID space until 2012, when it launched its Optimus 5900 reader.

Intermec’s 154 RFID patents could prove the most valuable part of the merger for Honeywell in the long run. Even with RFID there are integration questions, such as how Honeywell will handle the well-established royalty and licensing program introduced by Intermec years ago.

What happens with the barcode side of the business remains to be seen. Richa Gupta, an analyst with VDC Research in Natick, Mass., posted an interesting blog in which she speculates about how the integration of the two companies will unfold when it comes to Intermec’s barcode printing and scanning business. Here is an excerpt:

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.

However, Gupta speculates that likely won’t be the case for Intermec’s printing business, which she expects will be sold off, likely to Zebra or Sato Corp. According to VDC, Intermec is one of the leading barcode print vendors, ranking fifth in global vendor share. Here’s why Gupta thinks Honeywell will ditch that business:

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.

Click here to read the entire blog post by Richa Gupta.

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