Zebra Pivots Into AI, Robotics with Acquisitions
September 1, 2021 Alex Woodie
Zebra Technologies is a well-known provider of barcode printers, RFID scanners, and mobile computers, which puts it squarely in the data path for manufacturers, distributors, and retailers. With Monday’s announced acquisition of artificial intelligence (AI) software provider Antuit.ai, Zebra is positioning itself for the emerging age of intelligent automation solutions.
Antuit.ai is a Dallas, Texas-based provider of an AI-powered demand forecasting solution that’s designed to ensure that companies have the right product in the right place at the right time and at the right price. The company’s software as a service (SaaS) offering is used by consumer processed goods (CPG) manufacturers like Pepsi and Philips, and retail chains like Walgreens and Eddie Bauer.
Antuit.ai claims that it’s able to achieve better results than competitors through its unique use of AI and machine learning. “Rather than force fitting data through pre-defined data models, our SaaS IP [intellectual property] blends industry-proven, artificial intelligence and machine learning models to deliver maximum predictability from the available data, at any level of time, product and market hierarchy.”
Zebra was impressed enough with Anuit.ai that it decided to acquire the company undisclosed amount. According to Zebra CEO Anders Gustafsson, the Antui.ai offering will fit in nicely with its existing retail store execution portfolio. “It will also enable us to offer our customers in the CPG industry an analytics, AI, and automation solution that supports more efficient planning and operations with greater visibility across the supply chain,” he stated in a press release.
If the deal goes through (and there’s no reason to think it wouldn’t), this will be the latest in a slew of acquisitions that are helping to transform Zebra and its offerings to meet emerging demands for smart systems in manufacturing, distribution, retail, and logistics industries.
In July, the company announced the acquisition of Fetch Robotics, a manufacturer of autonomous mobile robots (AMRs) that can be used to pick products off shelves in warehouses and factories. The acquisition was completed in August 2021. In May, it acquired Adaptive Vision, a Polish company that develops machine vision software for manufacturing and other industries. The company quickly began selling the Adaptive Vision intellectual property under the company’s Zebra Aurora platform.
Zebra’s stock, which is traded on NASDAQ under the ticker symbol ZBRA, has exploded in value since the start of 2020. It was trading around the $250 at the beginning of January 2020, and has since more than doubled in value, giving the company, which first went public in 1991, a market capitalization around $31 billion.
So what is driving that growth and the heady price-to-earnings (P/E) ratio of 41.6? It’s certainly not the topline number, which has been mostly flat for the past three years. The company reported annual revenues of $4.45 billion in July 2021, which was about 1 percent lower than the previous year and slightly better than 2018. It recognized $504 million in profit in 2020, representing a 7.3 percent decrease from 2019, although it was a tick better than 2018.
A better explanation may be the COVID-19 pandemic, the massive scramble for digital transformation, and the wave of AI and Internet of Things (IoT) investments that are expected in the next few years.
Since COVID-19 smacked us across the collective face in March 2020, companies in the CPG supply chain have been scrambling to upgrade their systems and avoid bottlenecks that have impacted the availability of many goods on the shelves of American supermarkets. Companies that had more sophisticated forecasting and demand-planning systems did better than those who relied on Excel.
But there’s only so many barcode scanners and RFID readers one can sell. The bullishness recently may be due to Zebra’s pivot into AI and software, which can be much more profitable than selling hardware. As the company integrates Anuit.ai and the other acquisitions in robotics and machine learning, it will be worth watching how it brings those solutions to market, particularly in the blue-chip sectors of the market where the IBM i is strongest.