Zebra Technologies Corporation (NASDAQ:ZBRA) makes printers which companies use to track inventory. Until recently, this meant barcode printers. However, Zebra's customers are increasingly using RFID technology to track and manage inventory, and Zebra sells RFID printers as well. RFID tags are like bar codes that can be read by a scanner several meters away - for example, RFID tags are used to determine which merchandise needs to be replenished on a shelf or to identify which of the items a shoplifter is carrying through the exit of department store are stolen and which are actually purchased. The market for RFID tags is rapidly expanding as a broad range of companies experiment with and integrate the technology. Wal-Mart, one of the largest supporters of RFID, has required all vendors of its subsidiary Sam's Club to tag pallets shipped with RFID tags. The company earned $804 million in sales and $47 million in net income in 2009.
Slightly more than 50% of Zebra's revenues coming from outside the US. Moreover, the company's international revenues grew at approximately twice the pace of its U.S. revenues. In order to boost growth, the company is also investing heavily in new technologies. However, the company is susceptible to a weak economic environment because the demand for goods, and ultimately Zebra's products, fall. In 2009, the company's net sales fell by 11.7%.
Although traditionally a producer of bar code scanners and printers, ZBRA continues to expand its product range to products that used to track more valuable assets where a high level of security is required. In addition to bar code equipment and RFID devices, ZBRA produces secure printers used to make driver's licenses and national identification cards. In addition to its own research and development program, ZBRA uses acquisitions to enter new markets for inventory tracking systems.
Zebra's sales growth are strongly linked to the economic environment. In a struggling economy, consumers are spending less money and thus the demand for goods and services decreases. As a result, manufacturers slow down their production. When this happens, they are managing fewer inventories or selling fewer items and thus don't need as many of Zebra's tags to keep track of changes. Zebra's bottom line suffers from this as the demand for its products decline. In 2009,a s a result of the sluggish global economy, the company's net sales fell by 11.7%.
In the markets for printers and related hardware Zebra competes with Hewlett-Packard Company (HPQ), Canon (CAJ), Xerox (XRX) among other companies. Zebra has an advantage in bar-code printing because bar-code printing is primarily used for inventory tracking and management; Zebra is also able to offer software and services as part of the package, while many of its competitors do not.