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This research note is restricted to the personal use of Kishor Vaswani

(kvaswani@controlcase.net).

MarketScope for the 'Ruggedized' Handheld

-Computer Market (Global)
14 December 2009 | ID:G00172401

Tim Zimmerman | Ken Dulaney | William Clark

We assess key vendors that provide ruggedized mobile computers that include scanners
and imagers designed for high-performance process enhancement and data collection
environments.

What You Need to Know

The market is set to move to another level of maturity and optimization. In 2009, sales of
ruggedized handheld computers declined by 15%, and core industries like manufacturing
and retail were notably affected by the recession. Enterprises moved from projects that
expanded their mobile applications to increasing productivity and optimizing their
installations. Traditional vendors also continued to lower the barriers of entry into the
ruggedization arena by sharing their expertise in exchange for outsourced engineering and
manufacturing in an attempt to streamline their operations. This move is contributing to
prices eroding in the market.
Businesses must continue to align their processes that require ruggedized handheld
computers with the entire enterprise IT road map or risk losing this key knowledge. They
need to understand and integrate ruggedized-specific requirements within internal skill
sets and external relationships that provide expertise in operating systems, application
development tools, wireless communications, and security and management systems. New
longer life cycle requirements are a reversal in recent trends to historical time frames and
now match the five to seven years of many enterprise networking components. The key for
enterprises is to keep a close watch on hardware and software technologies needed to
develop, deploy and maintain their applications as software tools continue their rapid
technology advances. Long-term strategies must ensure that hardware and software have
a high degree of integration with the overall business processes to prevent a single
component introducing a weak link. We believe that during 2010 and 2011, the market for
ruggedized handheld computers will rebound, but the average selling price will continue to
decline as hardware vendors struggle to differentiate their products.

MarketScope

Product Overview
The ruggedized market continues to struggle to define the line between "rugged" and
"durable." Vendors are seeing increased competition with products from adjacent markets,
as well as the substitution effect of less-costly smartphones contributing to the often lesser
requirements in key markets. Thus, Gartner expects prices of ruggedized handheld
computers will decline by 5% per year through 2012. While ruggedized handheld
computers are designed for a market where survivability is a primary criterion, vendors are
beginning to struggle to differentiate themselves outside of defined product families
consisting of PDA form factors, handle-based mobile clients or full-screen devices that can
be carried, used on table tops or mounted in forklifts or on carts. Vendors have spent
years gaining the knowledge necessary to meet the specialized requirements of these
vertical market-specific, ruggedized handheld computers.

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During the last five to eight years, these same operations have looked to create lean
development or manufacturing operations, and many have opted to outsource the
development and/or manufacturing of their product lines. As these projects are
implemented, there is a knowledge transfer occurring from the historical vendors to their
outsourcing partners. The transfer has taken many years, as information about sealing,
vibration, static and drop is communicated about the different industry form factors. This is
spilling over into new technologies, such as larger touchscreens, mega pixel imagers, more
functional codecs and radio frequency identification (RFID), to create a new generation of
multimodal devices. Ruggedized handheld computers have historically focused on mobile
data collection, often incorporating bar code scanners operating in batch (nonwireless) or
real time (wireless mode). Shipments by year-end 2009 will be down as the ruggedized
handheld computer market ships $2.7 billion. We estimate worldwide spending on these
ruggedized handheld products will decline by approximately 7% to $2.5 billion in 2010. To
increase the target available market, traditional data-collection vendors continue to expand
into new applications where multimodal input capabilities are needed, and where speech
recognition, sensory input and other technologies are combined with traditional scanning,
imaging or touchscreen data collection. These efforts also counterbalance the lost revenue
as new vendors continue to enter or take market share in the ruggedized market.
Ruggedized handheld computers are built and tested by their manufacturers to attain a
tougher set of specifications than those met by mainstream commercial device vendors.
Such tests may include shock and vibration resistance, the ability to work properly within a
wide temperature range, and the ability to tolerate high levels of dust or moisture. To
reduce service costs and improve the user experience, vendors are rapidly closing the gap
between "durable" devices and "ruggedized" devices. As a result, the pricing premium once
commanded by ruggedized handheld computers is slowly deteriorating and putting
additional pressure on traditional, ruggedized handheld-computer vendors, such as
Intermec and Motorola. In the past, vendors were able to maintain higher prices because
the return on investment (ROI) for the automated and improved business process was
justified. In today's economy, however, the total cost of ownership (TCO) is being
scrutinized. In addition to upfront product pricing, annual service and maintenance costs
are also under attack as they become a larger component of TCO. Enterprises need to
analyze this through the use of TCO and mobile workforce profiles. Discount pricing
structures for this industry are not aligned with the PC marketplace, even though some
enterprises attempt to use nonruggedized platforms in the place of their ruggedized
counterparts. Discounts for ruggedized handheld computers can approach 50% for
reasonable volume purchases (approximately 500 units); therefore, buyers should not be
put off by list prices.
Platform-based designs for specific product families are increasingly becoming the norm to
ensure the flexibility to add functionality, as needs arise, and to maximize investment
protection. This flexibility helps reduce the number of stock-keeping units, thus lowering
inventory costs and minimizing downtime. Ruggedized handheld computers include
peripherals, such as bar code scanners, imagers, sensors and connectors, which allow
various types of measurements or data inputs. The ability to leverage common battery
chargers and other peripheral connectivity can reduce the time to market, as well as the
product cost, which is now spread over more units.
A variety of wireless communication options, such as Wi-Fi and wireless WAN, are often
used to enable real-time communication. Windows CE (includes an operating system [OS]
and browser and sometimes Microsoft's Pocket PC applications) and Windows Mobile (5.1
and above are most common, with leaders already moving to 6.1) are the platforms that
most vendors supply. Most vendors are dedicated to the use of Windows Mobile as their OS
platform and ecosystem. We believe that this is the right choice for an industry that has
sufficient volume to chart other courses. Windows Mobile synergy with back-end
applications and strong development tools is right for a market that is focused primarily on
vertical market solutions. There have been discussions about a move to Linux, fueled by
customer requirements; but those requirements have been motivated by a need to reduce
price and a belief that Linux cuts costs. It might cut out the minuscule licensing costs for
Windows Mobile, but we believe it would stress the suppliers to keep up with the demands
for drivers for new peripherals and to maintain robust interactions with the myriad
business systems employed in the market.

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Windows Mobile for the ruggedized market will be maintained within revision 6.x, as
Microsoft moves to rebuild its handheld consumer business with Windows Mobile 7
(Windows Phone). Microsoft likely will not embrace keyboard devices for Windows Mobile
7, but will maintain 6.x for this purpose. Windows Mobile 6.x is stable and most of the
enhancements will come from software provided by the OEMs and via third parties.
Therefore, this change will not affect ruggedized handheld computers purchased during the
next three years and with an expected life of five to seven years. We may also see a move
back to Windows CE as the platform instead of Windows Mobile, although that would
present some concern because it would leave out the collaboration capabilities embedded
in Windows Mobile that we believe represent the next great area of productivity
enhancement for Gartner's client base. That move could be supplemented by Microsoft
making those clients available through a separate offering (e.g., Office Communications
System for Windows CE) or through enhancements by the OEMs to cover this area.
The innovation in vehicle-mounted handheld devices has continued to be slow. There has
been little momentum toward the integration of the electronics into the vehicles that was
promoted several years ago. Vehicle-mounted handheld devices are split between Windows
Mobile and Windows XP/Vista. Windows XP/Vista occurs on some devices but, given their
low battery efficiency, these devices tend to be larger, more expensive and connected to
larger power supplies.
Vendor Overview
While we continue to consider the ruggedized handheld-computer market as mature,
changes in the market have resulted in more vendors. These new players continue to forge
their way through the barriers associated with ruggedized handheld computers as they
expand the target available market by using these highly specialized products to solve
business problems in adjacent markets. The 2009 MarketScope has two new entrants,
Casio and Unitech, in addition to the traditional mainstream vendors.
Gartner's MarketScope format provides a closer examination of selected criteria and
highlights areas in which vendors differ. We focus on each vendor's ability to envision and
execute creative marketing strategies, product and service innovations, and competitive
sales strategies, as measured by the vendor's track record, market responsiveness and
customer experiences. We use a MarketScope format to evaluate these vendors because
the size and maturity of this market segment do not warrant the frequency of updates that
other markets do. We evaluate the vendors about which we get the most inquiries. We do
not include the myriad resellers or repackagers of baseline technology.
Market/Market Segment Description
Gartner defines ruggedized handheld computers as devices that:
• Use a mainstream OS, such as Windows CE, Windows Mobile or Windows XP
• Are designed to withstand a minimum of three consecutive four-foot (1.25 meter)
drops to a concrete floor on the X, Y and Z axes
• Are designed to work in extreme temperatures, moist or dusty environments,
indoors or outdoors
These vendors design, build and support computers for applications where environmental
or usage conditions would quickly render standard, off-the-shelf handheld computers
inoperative or expensive to maintain — for example, in oil and gas, packaged-goods route
delivery, utilities, forestry, public safety, construction, retail, wholesale and warehouse
applications. Ruggedized handheld computers are commonly used for data capture and the
communication of that data to a server that enables real-time access to data by decision
makers.
Enterprises want devices that are modular and flexible enough to last for five to seven
years in a rapidly changing environment. Support for RFID is getting a lot of verbal
support, but not much traction at this time. Users want the flexibility to move into RFID on
their own timetables, without having to displace large portions of their investment in IT.

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Inclusion and Exclusion Criteria

Gartner selects the vendors to be included in a MarketScope based on a variety of vendor-
independent criteria, with final determination made by Gartner analysts. Factors that
contributed to a vendor's inclusion or exclusion on this MarketScope include:
• Vendors must have more than two ruggedized mobile handheld product families.
This does not include tablets or laptops.
• Global presence through direct sales or through distribution channels. The company
demonstrates a competitive presence and sales to Gartner analysts.
• Market share and revenue data (a measure of vendor penetration in the market).
• Client inquiry activity (reflecting Gartner clients' interest in the vendor and its
products), as well as the company regularly appearing on shortlists for final
selection.
• The vendor's ability to deliver new or interesting technology (demonstrating an
understanding of, and innovative approach to, market needs).
Excluded Vendors
• Vendors that provide devices similar to rugged handhelds manufactured at higher
specifications than consumer grade but did not meet the inclusion criteria include
Panasonic (Toughbook), Zebra Technologies, Data, Trimble, Garmin, Magellan,
Dauphin, TomTom, Motorola (iDEN and other two-way radios), EADS (two-way
radios) and Harris (two-way radios).
• Vendors that did not meet criteria of noticeable market activity include 2t, Aceeca,
Advantech, Amrel, DAP, Denso, DT Research, Elbit Systems (Talla-Tech) and
Trimble
• Vendors that did not meet ruggedization criteria include Socket Mobile, Glacier
Computing
Vendors Added
• Casio
• Unitech Electronics
Vendors Dropped
• None in 2009
Rating for Overall Market/Market Segment
Overall Market Rating: Positive
By definition, a "mature market" experiences relatively little change in vendor participation
and small annual shifts in market share. A few large vendors offer point solutions in a large
market in which barriers to entry are high. This is an apt description of the ruggedized
handheld-computer market, in which the vendors described offer strong products that can
usually scale beyond the requirements of most end users, and they have mature software-
development capabilities. Vendors push one another as new functionality is released, and
the leaders take turns holding a temporary advantage. It is a relatively stable market with
solid performers, and expectations are for slow but steady market growth in the range of
8% to 13% compounded annually, punctuated by occasional periods of rapid growth
brought on by new technologies. Due to economic challenges in sectors such as retail and
a shift toward lower-end offerings, we have lowered our estimate for worldwide market
growth for ruggedized handheld computers from 10% per year through 2012 to a slight
decline. These types of offerings lie at the heart of operations where project priorities
move from growth to process improvement during economic changes and in mobile
applications, such as field service and enterprise asset management, where ROI will
remain very high, even during times of tight budgets.
We have a few minor reservations regarding this market, including:
• Some small vendors may represent risky investments because of poor leverage
within the supply chain and the inability to maintain long-term financial solvency.
• There are few new entrants to ensure vibrant new products and processes.

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• Some products have steep requirements to enable connectivity to legacy systems.

• Some pricing strategies appear to be designed to keep product list prices high.
Evaluation Criteria

Table 1. Evaluation Criteria

Evaluation Comment Weighting

Criteria

Customer Relationships, products and services/programs that enable clients to High

Experience be successful with the products evaluated. Specifically, this includes
the ways in which customers receive technical support or account
support. This can also include ancillary tools, such as mobile device
management platforms, customer support programs (and the
quality thereof), availability of user groups, service-level
agreements and so on.

Innovation Innovation and solution-oriented thinking that addresses standard

environmental requirements, difficult radio frequency environments,
voice communications, scanning technologies (laser, imaging),
ergonomic designs, industry-specific requirements, such as drop
tests, and intrinsically safe devices.

Marketing The clarity, quality, creativity and efficacy of programs designed to high
Execution deliver the organization's message to influence the market, promote
the brand and business, increase awareness of the products, and
establish a positive identification with the product/brand and
organization in the minds of buyers. This "mind share" can be
driven by a combination of publicity, promotional, thought
leadership, word-of-mouth and sales activities. This includes
assessment of relationships with independent software vendors,
system integrators and value-added resellers.

Marketing A clear, differentiated set of messages consistently communicated standard

Strategy throughout the organization and externalized through the website,
advertising, customer programs and positioning statements.

Offering The vendor's approach to product development and delivery that standard
(Product) emphasizes differentiation, functionality, methodology and feature
Strategy set as they map to current and future requirements.

Product/Service Core goods and services offered by the vendor that compete standard
in/serve the defined market. This includes current product/service
capabilities, quality, feature sets and skills, whether offered natively
or through OEM agreements/partnerships as noted in the market
definition and detailed in the subcriteria.

Sales Strategy The strategy for selling products that uses the appropriate network standard
of direct and indirect sales, marketing, service and communication
affiliates that extend the scope and depth of market reach, skills,
expertise, technologies, services and the customer base.

Source: Gartner (December 2009)

Figure 1. MarketScope for the 'Ruggedized' Handheld-Computer Market

(Global)

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Source: Gartner (December 2009)

Vendor Product/Service Analysis

Casio
Casio (Tokyo) established itself beyond its home borders in Japan in the early days of the
PDA in the mid-1990s. Finding little market for general-purpose PDAs, it developed vertical
market products that were more ruggedized and specialized than competitive PDAs that
are offered through its Industrial Devices division. Its products can be found globally
through its system of resellers. Casio's most significant product offerings are its handhelds
with embedded printers (the IT-3100) used in point-of-sale applications used in airline
duty-free shops, for example. Casio's integrated approach contrasts with the separate
printer approach of Zebra and Intermec, which connect to a large variety of handheld
offerings today. A key advantage of integrated printers is the one-piece design that tends
to make the overall unit bigger than the two-piece options. Most of Casio's products are
low end, targeted at low-cost application needs and would compete best against the
Motorola MC1000 line for distribution, and against products like Janam in the PDA area. Its
DT-X30 targets transportation and field service, and is the most rugged communications-
capable system and most powerful in its lineup. Casio offers scanning capabilities in some
of its units, with only a few units offering cellular.
Casio produces products for opportunistic demands but does not pursue periodic wholesale
lineup changes as do the largest vendors in this market. Thus, some of Casio's products
have been around for long periods, while other products are newer. Where the product has
lasted, Casio has one of the most extensive sets of peripherals of any vendor. Casio is not
well-suited to customers that have a variety of handheld needs and wish to deploy them
on consistent software images. It does not have a dedicated end-user sales organization in
each sales geography, so buyers must rely on resellers. The company's product and
channel direction is largely done from Japan, and marketing is highly distributed through
the channel. Casio products can be employed where its unique designs or price points
meet specific needs. As with many of its other products, product quality is expected to be
good but servicing must be done through distribution rather than through a Casio
organization.
Rating: Caution
Datalogic
Datalogic is based in Bologna, Italy, and is a longtime supplier of ruggedized mobile
devices. For this research, we analyze products only from the Datalogic Mobile division.
Datalogic is strongest in Europe, the Middle East and Africa (EMEA), where 75% of its sales
occur. North America is the Mobile division's fastest-growing region as a result of sales and
marketing investment made over the last two years. Datalogic focuses on retail,
warehousing, field force automation, but can address most application categories.
Although 90% of customers purchase through the indirect channel, the company has a

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direct sales force. Target solutions include ruggedized handheld computers in the midrange
of performance, but Datalogic offers a complete lineup, including forklift computers, and
also offers mainstream support options in its target markets. Gartner has noted that
Datalogic's current model lineup has considerable overlap. To remedy the age and
complexity of its offerings, the company is working on product improvements for its core
vertical markets, which will be evaluated as they appear in 2010. Datalogic remains a
strong supplier of ruggedized handheld products and presents little risk deploying mobility
solutions.
Rating: Promising
Hoeft & Wessel
Based in Hanover, Germany, the company focuses on retail, with transportation, logistics
and field service as secondary markets. The majority of sales efforts have been in EMEA,
where 74% of customers purchase Hoeft & Wessel products. Its secondary market is North
America, with 20% of sales, and only minor sales in other geographies. Its Skeye division,
which sells handheld computers, increased sales to approximately $48.5 million in 2008.
Its two main products are the skeye.allegro, a lower-cost, traditional brick design targeted
to the retail market, and the skeye.pad XSL, a tablet computer targeted to the
transportation industry. Hoeft & Wessell's focus is on Windows CE platforms for its devices,
but it also plans to provide Windows Mobile 6.5 support. The company supplies point-of-
sale and kiosk terminals, and will entertain custom work in its target markets. Its current
revenue split is 70% for standard terminals, and 30% for custom-engineered products. Its
management tools are custom built and delivered from the manufacturer as managed
services.
The company is strong in its core markets. European retail and transportation customers
that are familiar with Hoeft & Wessell products should continue to shortlist the vendor for
projects. The continuing growth in a declining market is a contributing factor to its Positive
rating in this MarketScope. The flexibility and ability to address specific needs have earned
Hoeft & Wessell respect by its user community; however, continuing growth will be limited
to its target markets until it generates more revenue in its secondary markets.
Rating: Positive
Honeywell
The Scanning and Mobility division of Honeywell's Automation and Control Solutions is
based in Fort Mill, South Carolina, with technical centers of excellence located in
Blackwood, New Jersey, and Skaneateles Falls, New York. The organization has a broad
range of data collection and imaging technologies, including scan engines, bar code
scanners, and ruggedized handheld computers accumulated from several recent
acquisitions. The bar code scanner family includes handheld, hands-free and bioptic in-
counter models that have been purpose-built to meet linear, 2-D, and specialty application
needs across the market verticals it serves. The handheld computer family incorporates
data collection, wireless communications and location-based technologies in several
rugged, mobile form factors. As we noted in our last report, it will take the management
team a couple of years to integrate the acquisitions of Handheld Products and Metrologic
into a cohesive organization. Entering the second year under the Honeywell umbrella, we
are seeing integration efforts from Honeywell on marketing the combined product lines,
bringing together a single message. The division continues to focus on the retail,
transportation, healthcare, industrial and government markets in North America and EMEA,
which accounts for 80% of its revenue that is primarily delivered through its indirect
channel. As the division continues its integration efforts, it is important that it looks to
leverage the strength of the entire Honeywell organization to expand geographically, as
well as integrate into specific vertical market solutions that can be sold by broader teams.
The product team recently released the Dolphin 6100 to expand its handheld family. While
this is a solid PDA product, we look for the rationalization of this platform with the SP5700
OptimusPDA as the Metrologic and Handheld Products engineering and marketing teams
create a common road map for the differing classes of ruggedized handheld computers.
Honeywell still has not revealed an overall product road map that rationalizes the merged
lineups and that will result in necessary cost optimization.

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Honeywell is a financially sound company that presents little risk for companies purchasing
products in its core competencies (e.g., imaging and ruggedized handheld computers). The
company is competitive in its target markets, but continues to struggle with innovation
that would allow it to provide differentiation that is needed to expand its reach into new
markets and applications.
Rating: Promising
Intermec
Intermec (Everett, Washington) has charted a new course that includes streamlining the
supply chain while moving more work offshore, a greater reliance on the indirect sales
channel, restructuring marketing, reinvigorating R&D and a realignment of new products.
It has reprioritized its core solutions in warehousing, field service, in-transit visibility,
government and, while historically strong, in direct store delivery. Additionally, Intermec
knows it must become stronger in new markets to grow. Geographically, Intermec is
strongest in North America and Northern Europe. Its markets represent a broad set of
industries similar to Motorola.
As with other major players in this segment, Intermec's sales have declined over the past
12 months due to a weaker market. Intermec's revenue declined from $890 million in
2008 to an estimated $650 million in 2009, as a result. The company's core products had
gone far too long without updates. However, during the last 12 months there have been
several new product introductions, including the CK3 handhelds, the CN4 and CN50 mobile
computers; additional products are in development. Intermec's CN3 and CN4 products are
currently the backbone of its sales strategy; however, its new CN50, which sets a new
benchmark for form factor for wide area applications, could be migrated into other
application areas that do not require the ruggedness of the CN3 and CN4. We believe the
CN50 and its derivatives eventually will be Intermec's cornerstone products. The company
also maintains a strong lineup of peripherals and vehicle-mount solutions.
The new management team continues to be working hard to rebuild a strong foundation,
control costs and ensure that what it delivers is strongly competitive in the market.
Intermec and Motorola are the only vendors we see pursuing a broad reinvigoration of
their product lines. We see positive signs that Intermec will continue to strengthen its
position in the market. It remains in the strong No. 2 position in the market, following
Motorola.
Despite any challenges mentioned above, Intermec remains a strong supplier of
ruggedized handheld products and presents little risk to users. It has a solid cash position,
and we expect the company will grow in the coming year. Given the changes that have
occurred and the requirement to examine it in a fixed point in time, we rate Intermec
Positive.
Rating: Positive
Janam Technologies
Janam Technologies, based in Woodbury, New York, is one of the smaller vendors
providing ruggedized products. Although it has resellers worldwide, its customer activity
seems to be primarily in North America and Europe. It targets the ruggedized handheld
market (Wi-Fi only) in the retail, healthcare, hospitality, manufacturing and logistics
markets. Its management team is focused on organic growth, and it is one of the few
vendors in this market whose sales rose during the past year. Janam's product road map is
very modest, with a portfolio of four Windows Mobile-based models (XM60+, XM65, XM66,
XG100) and two Palm OS-based models (XP20 and XP30), but no forklift truck-mount-
capable products. While there continues to be a legacy installed base for Palm OS devices,
Gartner no longer recommends the product for new mobile application development.
In 2009, Janam's two main product launches were the XG100 (a gun form factor for bar-
code-intense applications) and an upgrade to Windows Mobile 6.1. Customer satisfaction
scores were higher than the industry average. Gartner clients with in-building application
requirements for ruggedized handhelds can benefit from considering Janam. Enterprises
with geographic needs in Asia/Pacific or Latin America that are looking to order large
volumes (more than 1000 units) need to perform additional due diligence in delivery and
support.

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Rating: Promising
LXE
LXE, a wholly owned subsidiary of EMS Technologies, is headquartered in Atlanta, Georgia.
In May 2009, EMS management announced the appointment of a new general manager of
LXE who brings sales experience from EMS's Satcom business unit.
In 2009, LXE launched the MX9, a Windows CE ruggedized handheld that is targeted for
outdoor applications, ports and intermodal operations with integrated GPS, as well as Wi-Fi
and wireless WAN (WWAN) communication options. LXE plans to extend Windows Mobile
6.5 across its entire product family in 2010. LXE's product focus continues to be vehicle-
mounted computers, hands-free wearable devices and high-end handhelds that meet some
of the most-rigorous durability specifications and are good fits for warehouses, ports,
distribution centers and outdoor environments. LXE products are often used in applications
such as freezers in food logistics and manufacturing. Its focus on speech recognition and
wearable computers provides differentiation, as competitors have been slow to integrate
the necessary functionality into existing handheld platforms.
While over 70% of its revenue is provided through indirect sales, LXE continues to get high
marks from customers for its sales and support to end users. This dedication has created a
loyal customer base and gives LXE an edge when customers require products that operate
in industrial or ruggedized environments. However, LXE has fared poorly in attracting new
customers where its service levels are not already appreciated.
Rating: Promising
Motorola
Like a few of the vendors in this research, Motorola also dropped in its overall score in this
MarketScope, but retains its Strong Positive rating.
Motorola's strengths are having a broad organization, worldwide support centers, excellent
industry knowledge and software partnerships, especially in retail, healthcare,
government, manufacturing and transportation/logistics. Its mainstay offerings are the
MC9000 series and MC3000 at the high end, and the MC70/MC75 and MC55 in the
midrange, and MC17 on the low end for retail. The MC9500, announced in September
2009, marks a shift by Motorola to its Mobility Platform Architecture 2.0 — an approach
designed to provide it with greater leverage in software, accessories and scale for its
flagship product line. At the same time, Motorola is holding its own in the low end of the
market.
Its challenges center on execution and future product direction in the face of the move of
the market downstream, right into the area of greatest competition. Gartner has noted
that Motorola's customer ratings dropped in areas of product documentation and customer
support. However, from a product line standpoint, it has remained strong.
Organizationally, the Enterprise Mobility Solutions division was created in January 2009
and encompasses three solution groups: Radio Solutions, Wireless Network Solutions and
Enterprise Solutions. While these teams continue to build on their domain expertise and
share resources, it is also important that in the next three years, as growth slows and
competition increases, that the Motorola product design and sales teams move toward
software and communications efforts, such as their TEAM initiative, and articulate the
incremental value add of Motorola ruggedized handheld computers on the Motorola
communication infrastructure. If not, Motorola stands to lose its vertical market dominance
in areas such as retail and government.
In last year's MarketScope, we mentioned that within Motorola's Enterprise Mobility
Solution division there had been some integration of management, but Gartner has not yet
seen significant evidence of enterprise uptake in new areas, such as unified
communications. Motorola's key to success will be to turn its scale into competitive
advantage at the low end, while maintaining leadership at the high end. Expect Motorola to
make some acquisitions to pre-empt more-intense competition at the lower end.
Rating: Strong Positive

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Psion Teklogix
Psion Teklogix is a mainstay as a ruggedized handheld vendor that is a combination of two
old-line vendors: Psion (U.K.) and Teklogix (Canada). It is focused on
warehouse/distribution, transportation (air, rail, ports and trucking), field services,
logistics and retail. After Motorola and Intermec, Psion Teklogix is the only vendor
providing a wide range of products for wide-area and in-building applications.
As we pointed out in the previous year's analysis, Psion Teklogix faced the challenge of its
R&D costs being higher than smaller competitors, while its market share remained much
smaller than Intermec or Motorola. In 2009, Psion Teklogix has been forced to make
significant staff cuts that will cause it to re-evaluate, and likely trim, its product portfolio
significantly in the midterm. While it made progress in the North American market in the
past two years, its direct sales model (more than half of its product sales are through its
own sales force) did not fare well in the recession. Today, more than two-thirds of Psion
Teklogix sales are in EMEA, where it has a strong presence. Gartner expects refreshes of
Psion Teklogix's products to be delayed by at least two to four years. It will need to rely on
the experience of its sales force and selling into its existing base while it repositions itself
during that time. Given the breadth of its product line and its recent refresh, Psion
Teklogix likely will be an attractive acquisition target by the defense or high-tech vendors.
Rating: Promising
Unitech Electronics
Unitech Electronics is based in Taipei, Taiwan, and has been a vendor in data collection for
almost 25 years. In early 2008, Unitech Group spun off the Unitech ADC Group and
officially became Unitech Electronics. Unitech Electronics has a full range of data collection
products, from PDAs to forklift truck-mounted computers. The company has a global
presence, with strong sales channels in the Asia/Pacific region, but more than 50% of its
revenue is from North America and EMEA. Unitech's ruggedized products have functionality
and communications options that are targeted to field service, healthcare, logistics,
warehousing and retail, with 90% of the sales coming through its indirect channel.
Unitech enters the Gartner MarketScope as a promising candidate with nine ruggedized
handheld-computer models that currently support Windows Mobile, with plans to support
Windows Mobile 6.5 at the end of 2009. Its solutions support Wi-Fi and WWAN
communications, as well as extended data collection through an integrated RFID in
addition to traditional keyboard, scanning and touchscreen data collection input
capabilities. Since Unitech relies heavily on distribution and product direction is often
centrally controlled and managed, we find that solutions may not be optimized outside of
target markets to take better advantage of new applications or geographical expansion.
Rating: Promising

Recommended Reading

"Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market"
"Ruggedized Handheld TCO Is in Line With Business PDAs"
"WLAN Data Collection Solutions: Why Standards May Not be Enough"

Strategic Planning Assumption(s)

Prices of ruggedized handheld computers will decline by 5% per year through 2012.

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as
markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant
or MarketScope may change over time. A vendor appearing in a Magic Quadrant or
MarketScope one year and not the next does not necessarily indicate that we have changed

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our opinion of that vendor. This may be a reflection of a change in the market and,
therefore, changed evaluation criteria, or a change of focus by a vendor.

Gartner MarketScope Defined

Gartner's MarketScope provides specific guidance for users who are deploying, or have
deployed, products or services. A Gartner MarketScope rating does not imply that the
vendor meets all, few or none of the evaluation criteria. The Gartner MarketScope evaluation
is based on a weighted evaluation of a vendor's products in comparison with the evaluation
criteria. Consider Gartner's criteria as they apply to your specific requirements. Contact
Gartner to discuss how this evaluation may affect your specific needs.
In the below table, the various ratings are defined:

MarketScope Rating Framework

Strong Positive
Is viewed as a provider of strategic products, services or solutions:
• Customers: Continue with planned investments.
• Potential customers: Consider this vendor a strong choice for strategic investments.
Positive
Demonstrates strength in specific areas, but execution in one or more areas may still be
developing or inconsistent with other areas of performance:
• Customers: Continue planned investments.
• Potential customers: Consider this vendor a viable choice for strategic or tactical
investments, while planning for known limitations.
Promising
Shows potential in specific areas; however, execution is inconsistent:
• Customers: Consider the short- and long-term impact of possible changes in status.
• Potential customers: Plan for and be aware of issues and opportunities related to the
evolution and maturity of this vendor.
Caution
Faces challenges in one or more areas.
• Customers: Understand challenges in relevant areas, and develop contingency plans
based on risk tolerance and possible business impact.
• Potential customers: Account for the vendor's challenges as part of due diligence.
Strong Negative
Has difficulty responding to problems in multiple areas.
• Customers: Execute risk mitigation plans and contingency options.
• Potential customers: Consider this vendor only for tactical investment with short-term,
rapid payback.

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technology business, Gartner does not provide legal advice or services and its research should not be
construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the
information contained herein or for interpretations thereof. The opinions expressed herein are subject to
change without notice.

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