Type: Public Company
Address: 116 Wilbur Place, Bohemia, New York 11716, U.S.A.
Telephone: (516) 563-2400
Fax: (516) 244-4645
Employees: 2,600
Revenues: $540 million (1995 est.)
Stock Exchanges: New York Chicago Pacific
Founded:1973
SIC: 3577 Computer Peripheral Equipment Nec; 3578 Calculating & Accounting Equipment
Symbol Technologies, Inc. is the world's leading manufacturer of bar code technology and related products and the only one of its growing competition with in-house design and development services to carry products from ideation to point of sale and beyond. From its bar code reading equipment and remarkable hand-held portable data collectors to radio frequency (RF) data communication systems, Symbol's innovations have allowed health care, postal, retail, and transportation companies worldwide to revolutionize their order and inventory management systems.
Symbol was founded in New York in 1973 by Dr. Jerome Swartz and a venture partner named Sheldon Harrison. A physicist with a keen interest in laser applications, Swartz was a graduate of the Brooklyn Polytechnic Institute and had been working as a consultant in optical and electronic systems and instruments. Building and experimenting out of his garage in Stony Brook, New York, Swartz invented a laser scanning device for use with bar codes. His new invention drastically changed the grocery and retail industries over the next decade, and Swartz's newly formed Symbol Technologies, Inc. rode the wave. Throughout the next several years, Swartz's technical skill and innovative thinking earned him dozens of technical U.S. patents, many of which were basic patents for Symbol's growing line of sophisticated hand-held scanning devices.
Early in its evolution, Symbol formed a reciprocal relationship with the State University of New York (SUNY). Dr. Swartz served as a part-time professor of electrical engineering at SUNY Stony Brook, while Symbol contributed funds for grants and research and recruited students for internships and part-time positions. This was a somewhat unusual arrangement, since Symbol was a very small company and not in a position to spend what little money it had on charitable contributions. Yet Swartz believed in supporting higher learning, and the relationship proved fruitful for both. By the end of the decade, a young graduate named Rich Bravman, who had received a computer science degree from SUNY, was recommended by the chairman of the electrical engineering department to Symbol's management. Bravman was hired and would eventually served in a variety of top management positions with the company.
In June 1979, Symbol went public with an initial offering of 456,500 shares on the NASDAQ exchange. (The company later switched over to the New York Stock Exchange in 1988). Four years later, at the end of 1983, Raymond Martino joined Symbol as president and COO, leaving his position as vice-president of marketing and sales at Mars Electronics (a division of M&M/Mars Inc.) of Folcroft, Pennsylvania. The president of M&M/Mars Inc., Dr. Fred Heiman, also had a connection with Symbol--he was a member of Symbol's board, played a pivotal role in the fledgling company's development, and eventually came aboard full-time. During these years, Symbol was bringing in only around $5 million per year, but Martino, Heiman, and the rest of Symbol's employees and board believed in Dr. Swartz's abilities and the expanding product line.
Between 1983 and 1985, Symbol's revenues leapt to $13.9 million and its work forced swelled to 152. As sales increased, Symbol continued to add to its team of engineers and by 1987 the company's size required a move to new, spacious corporate headquarters. Due in part to the company's 1988 acquisition of the MSI Data Corp. of Costa Mesa, California, originators of a portable data terminal, Symbol became the sole contractor to the U.S. Department of Defense for hand-held laser scanners. With technology from MSI and its own research and product development, Symbol built a very lightweight (20 ounces) hand-held scanner and then provided a radio frequency to link it to computer terminals. The concept was revolutionary; the applications almost limitless. Though the purchase of MSI wasn't without complications, the combined technologies allowed Symbol to both break unprecedented new ground with its products and enhance the company's marketing capabilities in the U.S and especially in Europe.
By 1989 the company's sales had reached $222.3 million, increasing by a phenomenal 1,498 percent over the previous four years. Rich Bravman, the SUNY graduate who joined the company fresh out of school, was now vice-president of marketing. Symbol's employee roster, which had grown to 1,800 worldwide, was cited by Bravman as representing the company's "number one principle" of maintaining a motivated, happy work force, which in turn kept productivity and sales high.
Around mid-year 1989 the bar code industry slipped into a recession and holding its own despite a weakening industry, Symbol captured 40 percent of the market by 1990 and whittled competitors from nearly a dozen down to three by stringent protection of its patents, forcing those who survived to pay royalties (which amounted to nearly ten percent of the year's revenues). Though sales weren't up dramatically from the previous year's, Symbol's $231.5 million was impressive under the circumstances.
In 1991 the company made a major move in developing its prospects in the Far East. Previously unable to secure a footing in the vast Asian market, Symbol successfully defended itself against a lawsuit brought by the Japan-based Opto-Electronics Corp., which had sought to challenge Symbol's laser scanning technology patents. With the lawsuit out of the way, Symbol announced a joint venture with Olympus Optical Company, Ltd. of Tokyo to design and manufacture bar code data collection products under the name of Olympus Symbol, Inc. (Symbol owned 50.10 percent), which also became Symbol's worldwide distributor. In other international news, European sales (with the help of the MSI Data Corp., purchased the previous year) accounted for 30 percent of Symbol's overall revenue, and Japanese sales were expected to boost the figure substantially (by as much as $75 million) in time.
The year 1991 also marked the bar code industry's climb out of its recessionary trough, helped by what some analysts deemed Phase Two of the bar coding and data collection business. Phase One had included introducing the technology and convincing clients of its value. During Phase Two, bar coding products gained wider acceptance and use within the retail sector and other businesses. Moreover, clients began ordering the next generation of scanners in even greater quantities than before. This momentum was borne out by Symbol's year-end results with sales hitting $317 million, a wholesome leap of 37 percent over 1990's revenues.
In August 1992, Symbol reduced its 1,100 work force by 140 to control costs and improve efficiency. Four months later, the company initiated a restructuring program to consolidate engineering and manufacturing operations and to trim sales, marketing, finance, and administrative costs. The company took a pre-tax charge of $40.9 million for both actions. Despite a loss of $3.4 million in the third quarter from a domestic sales fall-off and the work force reduction, Symbol finished the year with net revenues of $344.9 million and a loss of $16.2 million.
Thanks to a sizeable jump in research and development funding from 1992's $13.6 million to $16.3 million in 1993, Symbol stunned the industry with several major innovations. Among them was the PDF417 Symbology, which encoded 100 times more data than traditional bar code labels, all in the same amount of space. Using a two-dimensional format, data was compressed into a denser code with multiple rows of encoded information that could be read both horizontally and vertically. Additional payoffs came in the forms of two new licensing agreements and an alliance with Microsoft. This year also saw a shift in focus away from Symbol's traditional laser scanning devices as the bulk of its earnings, to its newer products and applications. Bar code scanners had long dominated Symbol's sales, but went from representing 50 percent of sales in 1992, to 45 and 40 percent in 1993 and 1994, respectively. Symbol had also begun construction of a new $50 million headquarters in nearby Holbrook, New York, to house its growing work force, which had now reached 2,000 employees.
After 11 years with the company, Ray Martino retired as president and COO in 1994 and was named vice-chairman of Symbol's board of directors. Succeeding him was Jan Lindelow, formerly president of Swiss conglomerate Asea Brown Boveri, and a 25-year veteran of the information technology industry. Major boons for the company came in the form of contracts with the Arizona Department of Transportation Motor Vehicle Division; the American Association of Motor Vehicle Administrations' selection of the Symbol's PDF417 (2-D symbology and portable data file system) as its standard equipment; the installation on three continents of the Spectrum One wireless networks for retailer Toys 'R' Us; and a sales surge to $465.3 million (a 29 percent increase from 1993's $359.9 million), with international sales growing by over 48 percent to a record $141.1 million.
By 1995 Symbol dominated the worldwide bar code scanner industry, holding what analysts projected as 75 percent of the market, having installed more than three million scanners and portable data terminals and handling such heavy-hitting customers as the federal government (the U.S. Postal Service, the U.S. Army, and the Department of Defense), as well as American Freightways, Eckerd Drug Stores, Home Depot, Kmart, Target, UPS, Volvo, and others. By the end of the year, change was afoot when Lindelow resigned and longtime senior vice-president and Tomo Razmilovic was named president and COO.
Headed toward the 21st century, Symbol's future seemed secure, with more and more products and applications being introduced to a world increasingly needful of its technology. With portable data collection equipment ranging from $400 to $4,400 per unit, depending upon the level of technical configuration, Symbol's handiwork was accessible to companies of all sizes throughout the world, with customer support operations in 11 U.S. states and foreign offices in Australia, Austria, Belgium, Canada, France, Germany, Italy, Norway, Singapore, Spain, and the United Kingdom.
Principal Subsidiaries
Symbol Australia Pty. Ltd.; SymboLease, Inc.; SymboLease Canada, Inc.; Symbol Technologies Asia, Inc.; Symbol Technologies Canada, Inc.; Symbol Technologies GmbH (Austria); Symbol Technologies GmbH (Germany); Symbol Technologies International, Inc. (Delaware); Symbol Technologies International, Inc. (New York); Symbol Technologies Limited (United Kingdom); Symbol Technologies, S.A. (France); Symbol Technologies S.A. (Spain); Symbol Technologies, S.R.L. (Italy); Symbol Technologies Texas, Inc.; True Data Corporation.
Principal Divisions
Laser Scanning Division.
Further Reading
Biesada, Alexandra, "Symbol Technologies: Buy on the Short Frenzy?" Financial World, April 28, 1992, p. 18.
Demery, Paul, "Symbol, Olympus Target Far East," LI (Long Island) Business News, March 25, 1991, pp. 1,16.
"Fastest Growing Companies in N.Y. Area," Crain's New York Business, October 21, 1991, p. 20.
Frankland, Christine, "Close Up: Martino and Symbol on the Fast Track," LI Business News, December 2, 1991, p. 3.
------, "Motivated Workforce Helps Symbol Grow," LI Business News, November 13, 1989, p. 3.
Hord, Christine, "LI's Symbol of High Tech Change," LI Business News, February 7, 1994, pp. 17, 19.
Jochum, Glenn, "Close Up: Symbol's Chief Scans New Markets," LI Business News, January 2, 1995, p. 9.
Mamis, Robert A., "The Inc. 100: The 12th Annual Ranking of America's Fatest Growing Small Public Companies," Inc., May 1990, pp. 40-41.
Needle, David, "10 Hot Companies," Information Week, January 30, 1995.
Schonfeld, Erick, "Bar Codes: The Latest Industry Scan," Fortune, June 12, 1995, p. 141.
"Symbol Names Lindelow President," LI Business News, June 20, 1994, p. 16.
Talley, Karen, "Symbol is Stymied by Failed Bond Act," LI Business News, November 16, 1992, pp. 1, 13.
Zipser, Andy, "Attractive Symbol," Barron's, January 14, 1991, p. 32.
— Taryn Benbow-Pfalzgraf
