Zebra announced in March that it intends to acquire Matrox Imaging for US$875 million to expand its offerings in the fast-growing automation and vision technology solution space. Matrox Imaging provides advanced machine vision components and systems, including platform-independent software, Software Development Kits (SDKs), smart cameras, Three-Dimensional (3D) sensors, vision controllers, Input/Output (I/O) cards, and frame grabbers that are used in factory automation, electronics manufacturing, automotive, and healthcare. Companies such as Bosch, Novartis, and thyssenkrupp use these solutions to enable higher degrees of automation, in addition to augmenting the suite of tools available to frontline workers. The transaction is expected to close in 2022.
Machine Vision Market Tenure and Context
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IMPACT
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Zebra’s first foray into the machine vision market was in 2021 with the launch of its fixed industrial scanning and machine vision portfolio. This portfolio was expanded with the subsequent acquisitions of Fetch Robotics (industrial automation), Adaptive Vision (machine vision), and antuit.ai (Artificial Intelligence (AI) software). Zebra’s initial focus has been on the low end of the machine vision market.
Matrox Imaging, by contrast, has been in the machine vision market for 45 years and focuses on the high end of the market. It generates annual sales of approximately US$100 million with a higher profit margin profile than Zebra and brings significant expertise in machine vision software, ML, and DL. Matrox Imagining’s software engineers will join Zebra’s Research and Development (R&D) team and its portfolio will gain access to Zebra’s global channel and footprint.
Downstream Benefit
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RECOMMENDATIONS
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The Matrox Imaging acquisition is complementary to Zebra’s overall portfolio by giving it a broader market posture and significantly augmenting its expertise in software, ML, and DL. The industries that will benefit most from the new business combination are automotive, pharmaceutical, electronics, and food & beverage because these are the markets where Zebra is focused. However, ABI Research also sees relevance in other discrete industries like consumer goods and medical devices due to the rapid and varied nature of new product introductions in consumer goods and the stringent requirements for high-value medical device manufacturing.
Ultimately, end users want a complete, end-to-end solution. There is a long list of companies that supply aspects of vision systems, including Basler, Cognex, Datalogic, IDS Imaging, ISRA Vision, Keyence, National Instruments, Omron, SICK, Teledyne, DALSA, Teledyne FLIR, and TKH Group. Acquiring Matrox Imaging after standing up its own portfolio of fixed industrial scanning and machine vision solutions is an important move for Zebra to show it is serious among the established and growing list of companies targeting quality automation.
Machine vision will continue to grow as a key enabling technology in automation and human-machine collaboration. To date, the technology has been mainly deployed in quality inspection, defect detection, security, and surveillance—the largest area of which is defect inspection, with an installed base of 15.6 million camera systems in 2022, growing to 28.7 million in 2027 (at a 13% Compound Annual Growth Rate (CAGR)) (see ABI Research’s Commercial and Industrial Machine Vision Market Tracker: Manufacturing market data (MD-CIVMM-101). Over this period, the expectation is that suppliers like Zebra will embed their solutions within the wider manufacturing process for more proactive closed-loop quality to support clients from New Product Introduction (NPI) through Manufacturing Production (MP) by leveraging a combination of partnerships, product innovation, and acquisitions. Keys to success include strong and rapid software development, global distribution, and world-class support.
