Point of Sale Information and News for April 2014

What happens when one 800 pound Gorilla merges with another 800 pound Gorilla in any given industry?  Well the first thing that happens is a press release.  In a deal worth $3.45 Billion dollars, Zebra Technologies acquired Motorola’s Enterprise Business unit.  The Moto business unit makes barcode scanners and mobile rugged barcode scanning computers for a massive array of uses and industries.  Zebra is the premiere barcode label printing hardware manufacturer in the US.

Next comes the questions.  What does this mean?  Why are they doing this?  Who’s gonna be the new brand?  Is Zebra buying Motorola or is Moto just looking for a strong partner to shake trees with?

With both companies being the largest in their given areas (Motorola rules the enterprise barcode scanner world, while Zebra has the corner on barcode printers and mobile barcode printing) the combination of the two will most likely produce the King Kong of the Automated Data Capture (aka barcode and POS) space.  But that’s an assumption.  They may continue to exist as independent brands, both with huge brand recognition and brand appeal.  They may both begin the slow and steady fall towards technological obsolescence.

The Motorola Enterprise Solutions unit has seen a huge decrease in sales in recent years.  With many of their enterprise customers racing to deploy solutions on smart phones and tablets, combined with a stodgy adherence to antiquated and unimpressive Microsoft mobile operating systems Motorola has been slow to adapt to the changing market.  The demand for ruggedized hardware has slowly decreased as businesses compare the overall ROI of ruggedized enterprise class products versus cheaper and weaker consumer grade hardware. 

When I first got into the barcode scanner business Motorola was one of the few companies in the space that had a low cost mobile barcode scanning solution:  the SPT-1500 and later the SPT1550.  This device was a Palm OS based barcode scanner with a laser scanner and a tough plastic shell.  We were able to create solutions for the device and sold many of these units into a wide variety of industrial, office and warehousing areas.  The device was cheap, lightweight and effective.  As the Palm OS phased out and was replaced by Android as the de facto cheap device operating system, no other devices in the Auto ID space rushed to fill this low end vacuum and businesses were forced to migrate to BYOD (Bring Your Own Device) or cheaper Apple devices like the iPod to accomplish these mobile data collection tasks.  But this has not been an adequate solution for companies.

The problem with consumer grade hardware in barcode scanning and data collection environments?  It wasn’t built for it!  When people say they can scan barcodes on their iPod camera, I say, “OK, but can you inventory that entire warehouse with your beloved device in a timely manner?”  It’s easy to say that something works in theory, only experience will tell you that something will work in practice.

So now Zebra has a bunch of devices and technology to bring to the coming “Internet of Things” where the ROI of BYOD is actually an attractive proposition for mobile enterprise solutions.  They have an opportunity to look at the low end market, where the consumer devices have been tearing huge holes in Motorola’s market share over the years and wonder how they can change that.  By developing cheap, but durable, low end mobile scanners with modern OS options they may be able to recover this toehold.  The short terms profits aren’t there for them, but that’s not what’s important if they wish to win against the consumer level hardware that’s gobbling up the low end market share and sending Auto-ID customers into the hands of consumer grade manufacturers.

Most manufacturers shrug off the low end market.  There’s no attractive profit margin, devices are disposable to the point that warranty contract attachment rates are minimal.  But this demand segment isn’t going away and the longer the likes of Zebra and Moto continue to ignore it, the quicker they will no longer be gorillas in the room.

A group of students at Sweden’s Lund University have concocted a new way to link a person to a payment account. Traditional credit cards are easy to use, but also really easy to duplicate or otherwise copy. Newer PCI compliance rules have made that a bit difficult, with the addition of hardware encryption in magnetic card readers, but some want to get away from cards entirely.

Enter the students, with a method that maps the vein patterns in your hand to identify who is making a purchase. Engadget had a pretty solid article about the method, and it seems like there’s a lot of promise to it. It also looks like there are a lot of steps that could make adoption a bit slower.

So with their setup, you apparently have to give the issuing agency a scan of your hand, social security number, bank info, and phone number, and you’d then be linked. In this instance, the startup the students created would act as an intermediary, meaning there’s one more step between retailers getting your info and also getting your money. If there was a way to set this up directly with your credit card company, I could see it becoming easier down the road. But in its current incarnation, there’s a pretty high barrier to entry.

That being said, I could see this being a great option for Universities or High Schools. Currently, most colleges require students to swipe a card to gain access to dining hall services or buy additional food items. The student (or their parents) can add funds to the account as needed, in case they are hungry and out of Universi-Bucks. In this instance, the payment system is relatively closed, so setting a student up to use it would be relatively straightforward. It does become another vector for contamination, unless the hand scanner is sanitized after every use.

I do enjoy seeing students and researchers trying to create alternative methods to authenticate a user for payment. Hopefully this catches on somewhere.