Top 20 automatic data capture suppliers, 2014

Last year, the global market for automatic data capture solutions (ADC) used in factories, warehouses and logistics applications reached $5.752 billion in sales, according to Massachusetts-based VDC Research Group.

The ADC market includes handheld and stationary bar code scanning and imaging devices, bar code printers and ruggedized mobile computing solutions for the factory and warehouse. VDC’s figures do not include consumables associated with automatic data collection, such as bar code labels. In previous years, this report has included RFID data. However, VDC Research Group no longer reports RFID market information. The analysis and graphs in this article reflect only the markets for rugged mobile device and bar code scanners and printers.

The 2013 global sales figures represent a decrease of one tenth of a percent from 2012’s comparable estimate of $5.76 billion, which had fallen 3.4% from 2011. Yet despite the contraction, the fact that 2013’s sales were flat suggests a low point on what could become a strong upward curve. VDC data projects the market will post a compound annual growth rate (CAGR) of 4% through the next five years before reaching $6.991 billion in 2018. This includes a 4.6% CAGR for bar code scanners and printers, and a 3.3% CAGR for rugged mobile devices.

Read last year’s Top 20 ADC report.

“The top theme this year across the market is that 2013 was a rough year for a lot of vendors, especially the market leaders and especially for scanners and printers,” says Richa Gupta, senior analyst for AutoID and data capture for VDC Research. “North America is hurting more than other regions for both handheld scanners and printers. But from my conversations with vendors, they are not too concerned because business did pick up at the end of 2013.”

Amid increasing hardware commoditization in the handheld space and an increasingly fragmented competitive landscape, Gupta says suppliers are facing significant price pressures. “For every vertical they’re targeting,” she says, “they’re running up against a lot more vendors than in the past.”

The Top 20 ADC suppliers
Revenues for the Top 20 suppliers in 2013 total $4.357 billion, down 7.2% from 2012. Ten of the companies reported revenue declines totaling a 4% decrease. Not including the two companies who are new to the list, the remaining eight companies posted gains of a combined 27%.

However, the list also reflects two key acquisitions. Last year’s third-place finisher Honeywell acquired last year’s fifth-placed Intermec. Their combined 2012 revenues totaled $920.7 million, but Honeywell has reported $765.8 for 2013. That figure was still enough to surpass longtime second-place holder Zebra.

At the top of the list, Motorola acquired last year’s ninth-place Psion, which reported $111.9 million before the acquisition. This year, Motorola stands at $1.336 billion, a slight decrease from last year. Gupta says the timing of some big orders in 2013 impacted the numbers, even as some of the anticipated deals finally closed toward the end of the year.

“On the handheld scanning side, Motorola and Honeywell are the leaders, but had a tough first half of 2013,” Gupta says. “They took a particularly hard hit in terms of the North American contribution. On the printer side, Zebra dominates, although their stationary printer sales were not as high as expected after some big deals didn’t come through.” Zebra finished third in 2013 with $545 million in revenues, down 8%.

Bar code printer & scanner market
The market is divided into four parts: handheld and stationary scanners, and stationary and mobile bar code printers. Stationary bar code printers were up 3.5% overall, but were down for the Americas. Mobile printers and both handheld and stationary scanners were down about 1% each.

Gupta says Asia’s revenues derive from bar code printers, sales of which were greater than both the Americas, Europe, the Middle East and Africa. Overall, Asia claimed the largest share of sales in 2013 for the first time since VDC began compiling the report, Gupta says.

Despite overall revenue contractions in the stationary printer category, Gupta says some Chinese suppliers actually saw significant growth, which contributed to the price competition and pressures that the industry leaders are feeling. The stationary printer category can also be divided into the industrial and desktop form factors. Noting ups and downs by region, Gupta says North Americans industrial printer sales contracted by 5%.

Gupta is watching the ongoing migration away from laser-based scanners toward camera-based technologies. Laser used to be the highest revenue generator for the handheld segment, she says, but shipments dropped 25%. Camera, or 2D-based scanners, are now in first place (47%), followed by lasers (31%) and CCD (charge coupled device, 22%), which are based on linear reading and tend to be a popular low-cost solution in emerging markets. The figures contrast sharply when compared to the 2011 rankings, Gupta says, when lasers enjoyed 43% of the market share, followed by cameras at 35% and CCD with the same 22%.

In summarizing the AutoID market, Gupta says customers expect modern solutions to be part of an integrated overall approach to track-and-trace initiatives within manufacturing and logistics. “It’s something these companies cannot live without,” she says. “In the last three or four years, data capture solutions have become more integrated within automation and operational processes for any type of organization, as opposed to an ad hoc solution. It’s not about a single solution anymore; it’s about how all of them work together.”

Trends in the rugged market
The rugged mobile market has long been a specialty niche segment of the broader mobile sector. According to David Krebs, vice president of VDC’s enterprise mobility and connected devices division, the rugged market today is becoming even more entrenched with successful suppliers creating differentiation beyond the mobile hardware around value-added deployment and support services.

Rugged mobile computer suppliers have faced considerable headwinds to the extent that the market has lost 10% in value over the last three years. The rugged mobile market is forecast to reach $2.8 billion in revenues in 2014, down from a high of $3.2 billion in 2011. Krebs says rugged handheld computers and rugged notebooks have been especially hard hit product categories. Much of the decline, he says, can be traced to the growing popularity of consumer smart phones and tablets among enterprise workers.

“However, equally important is the transition many legacy rugged customers are undergoing as they decide on their most optimal path forward,” Krebs says. “What this fundamentally points to is the need for a pivot among existing rugged vendors to not only better serve their existing customers, but to also create greater value for prospects.”

With Microsoft’s next generation OS for enterprise devices (Windows Embedded Handheld 8.1) very much a work in process, Krebs says many of these efforts have been focused on Android. However, with continued enterprise security concerns with Android and the still-limited availability of Android applications for rugged devices, Krebs suggests adoption to date has fallen short of expectations and is only beginning to scale.

With consumer-grade OEMs looking increasingly toward enterprise, the trend of consumer device encroachment could reach further into industries that were previously heavily reliant on rugged devices. “The consequence is that the sector has entered a state of limbo with vendors only just satisfying the needs of existing customers while being challenged to develop a value proposition that grabs attention of prospects,” Krebs says. “With slowing shipments and end users extending the lifecycle of deployed devices, the installed base of rugged handheld computers has stalled around 15 million units. At the same time, enterprise shipments of smart phones and tablets continued to scale with an estimated 45 million currently installed supporting line of business applications.”

Krebs points to omni-channel fulfillment and automation as key trends impacting the market. VDC’s research shows that nearly all warehousing systems are facing moderate to strong pressure to support more individual piece picking. AutoID’s ability to target accuracy in these applications is increasingly appealing. Of respondents to recent VDC research, 92% stated customer demands for faster fulfillment and the associated costs of errors exerted strong pressure on their operations.

“Managed mobile services reduce the impact and cost of downtime to achieve faster fulfillment of customer orders,” Krebs says. “Ensuring that mobile solutions can easily adapt to support various workflows—from crossdocking to picking and putway—is an increasingly common requirement among mobile decision-makers. Moreover, the ability to seamlessly integrate multiple solutions is vital. From voice technology to wearable mobile scanning solutions supporting high-speed sortation, today’s mobile warehouse solutions are becoming increasingly sophisticated. Decision-makers increasingly aspire to leverage these solutions and flexibly adapt them to specific workflows.”

Collecting the data
This is Modern’s 13th-annual look at the leading manufacturers of ADC hardware and solutions. Because the industry includes public and private companies, this is the sixth year in a row that VDC Research Group compiled the data.

To make our list, companies must sell in North America, though the chart includes worldwide revenues. Modern does not include resellers, systems integrators or other companies that do not manufacture ADC hardware. Since our readers are primarily focused on supply chain solutions, we do not include companies whose primary focus is the retail checkout counter or non-industrial settings, like hospitals, libraries or resorts. Nor do we include companies that only manufacture consumables like bar code labels and RFID tags.