Okay, we're going to get started now, so if everybody could take their seats, we want to stay on schedule today. First of all, thank you for coming to the Zebra view of retail. And I have on good authority that this is probably the earliest analyst breakfast on record in New York. So thank you all for coming. We really do appreciate that. And also, welcome to everybody on the web, where we are webcasting this live. I'm Douglas Fox, Investor Relations Officer for Zebra Technologies. And I want to thank you all for attending the breakfast this morning, and then also the tour of Zebra's NRF booth. And you should all have badges that will enable you to get into the show.
Also, so not just the Zebra booth, but you know, you could spend the day, even tomorrow if you want, at the show as well. What we want to do today, in fairly short order, is to give you a little bit of a perspective on Zebra today. As all of you know, or many of you know, at least, we completed the acquisition of the enterprise business of Motorola Solutions back in October. So, we are a much bigger company, and our presence at NRF reflects that. So we want to give you a perspective on the broader product line. We want to give you a perspective on the trends that we're seeing in retail and why we're excited about retail.
We also want to give you a little bit of perspective as well on our philosophy around design of products and why in particular we don't believe that the threat of consumer products if you will are as big as they might seem to some people. So the lineup today is, we're going to be leading off—l et's see. There we go. With Anders Gustafsson, our Chief Executive Officer, with some opening remarks. We're going to then turn it over to Girish Rishi, for Senior Vice President, to talk about the trends in retailing and what we're seeing. And then finally, we're going to turn it over to Senior Director Curt Croley for some remarks about the product design, which I think you'll find very interesting.
I'd also like to, at this time, thank a couple of other people who were very involved in setting up this breakfast. First, Amy Collis. She was very helpful in setting up, and I'm sure many of you had contact with her to get your badges and things like that. Also, Lucia Da Vagno , and then finally, Patrick Flaherty, Manager of Investor Relations. And there are other Zebra folk sprinkled throughout the audience. I want to let you know, you know, in addition to Anders, we also have Joe Heel, Senior Vice President of Global Sales, Mike Terzich, our Chief Administrative Officer, Juliann Larimer, our Chief Marketing Officer, and Phil Gerskovich, I think, is here as well. And are there any other executives in the audience here? Oh, and Girish Rishi.
Yes, so.
Mention him. So, forward-looking statements, and then a couple of things, just, kind of rules of the road here. What we will be discussing today are the trends driving the need for increased visibility. We're going to be talking about Zebra's innovative engineering and capabilities, design capabilities. What we're not going to be discussing today, importantly, our quarterly or full year guidance. We're not going to be talking about, questions on financial modeling or anything like that, or topics related to cost synergies. Those things are going to have to wait, for our fourth quarter earnings call, which will occur in, which will take place in February. So with that, let me turn it over to Anders for some opening remarks.
Thank you, Doug.
Oh, one last thing. If you could all hold your questions to the end, we want to, we're going to leave a few minutes at the end for Q&A, and then, hopefully, promptly at 8 o'clock, we're going to get you out the door, onto the bus, and then over to the NRF. Thanks.
So good morning. So this is an early morning. I think this probably is the earliest morning for an investor meeting. I can tell this is probably also the earliest morning for a presentation. It's quite a thing to roll out of bed and be all awake. But you know, this is now two and a half months since we closed on the acquisition of the enterprise business. We've now been the proud owners of the enterprise business for a couple of months. It's been you know, we've been very, very pleased with the performance and with how things have gone. I think we've had very good feedback from our customers. And also here at NRF, I think the—y ou will see the booth.
I think it really showcases everything we can do in a nice way, and puts a nice feel to the new company. This is kind of our coming out party, I guess, you can say, for the world to see us as one company now. So, you know, many of you know us or know our products, you know, so I spend a little bit of time on what it is we do for our customers. So, first, you know, we try to help our customers make their businesses as smart and connected as possible. It's all about connectivity and increasing visibility. You know, we help our customers improve the business performance for them, and I'll give you a couple of examples.
You go, you know, if you go to rent a car from Avis, and you go return that car, you know, they'll show up at the outside of the office building with a Zebra mobile computer and a Zebra printer. You know, the mobile computer reads the barcode on the car. They input gasoline, gas mileage, and all those kind of things. And, you know, they compute that, and out comes a receipt for you, so you can quickly get on the bus and back to the airport. And, from Avis' perspective, that really does two things. You know, one, it improves the customer service level. You know, you don't want to go in and stand in line with 50 other people.
You want to be able to get out there quickly. And the other thing is they, it reduces the space they need for their office building, so they can now have more revenue-generating parking lots or cars. So you can see that really helps improve both the efficiency and the customer service level for Avis. Another example of this would be, we worked with Coca-Cola bottling companies a couple of years back, together. Just, you know, before we were together, but we worked on the same project, where they used to have a lot of paper when they delivered a crate of Coke to a convenience store or whatever.
They go back to the office at the end of the day. They would have a stack of papers that they would have to hand in, and there were paper errors and all sorts of things. So they automated all these things to basically, you know, they can scan the crate, and when they go to the store to deliver it, they can print out the delivery, proof of delivery, and all of that is then uploaded automatically to the computers in the headquarters. They cut down the order-to-cash cycle by some 25%, and eliminated errors in a big way. That's another example of how we, with technology, can really help our customers improve their service to their customers, but also improve their efficiencies in their business.
We help also extend visibility into a customer's supply chains. I'll give you a couple of examples here also. Say, first, maybe talk about, you know, Hart Systems or Zebra Retail Solutions, where, you know, we offer a cloud-based service for all our retail customers and others, where we can send out a small Wireless LAN network and a number of mobile computers, and the customer's staff can then be able to themselves go around and basically scan all the inventory they have. And that improves, you know, the accuracy, because they know the store, they know the products, and they have their own workforce, so they can save a lot of money. They can be between 50%-75% less expensive than other alternative methods of doing this.
And customers have had a really high loyalty rate for that service. That's something we're very proud of. Another example would be, you know, RFID tags on blue jeans. Most people think of blue jeans as pretty standard, easy SKU. I've learned as a new retailer that blue jeans are actually a complicated SKU. Different lengths, widths, different styles. See, not models, they're cars. But if you, you know, historically, retailers would go out once a week and count the jeans on the shelf, and they would get to about 65% inventory accuracy. We put passive RFID tags on the jeans that can be encoded by Zebra printers and a fixed reader or a mobile reader to get the inventory, read the inventory accuracy, read the inventory that we also make.
You can really in seconds get to 98%-99% inventory accuracy. So if you're a retailer with thin margins, you can now reduce inventory because you only reorder what you don't have. Your revenues go up because you're more likely to have the in inventory what your customers want. So again, you get better efficiency and better customer service. And lastly, we have provide intelligence of assets and transactions and people. And here, again, a couple of examples. I would say first, maybe, you know, our NFL contract that you may have heard of. You know, so we've, we've, we have a contract with NFL where we can put basically putting two active RFID tags under the shoulder pads of NFL players.
This is a great example of saying how we can help bring visibility to a part of an operations that was otherwise, you know, black from a computer's perspective, at least. You could obviously watch it on video, but if you wanted to—o h, thank you. If you wanted to watch, be able to do post-processing and understand all the statistics, it would be quite different. So now we can, you know, all the football clubs, the broadcasters and everybody else can now look at how fast somebody's running, how fast somebody is accelerating, how far they're running, first quarter versus last quarter, first game versus last game.
So it provides a huge amount of input, so people who are into fantasy football and other things can now get a much greater visibility into their favorite sport. And this works in many other sports or other opportunities. You know, operations also. And lastly here, I would say, you know, we have, by using Bluetooth beacons, we have a solution we call MPact. It helps basically track customers going through a store. So now you can, with this, you can, you can know exactly how people, where they are, where they're dwelling, where they're not dwelling, and you can push marketing to them. You can do all sorts of things to learn more about their behaviors and how to, you know, basically provide them better service when they're in the store.
So there's a lot of things that we can now do to help our customers, you know, be more connected and be able to then take smarter actions based on that. So many of you probably heard us talk about a little bit of background to the deal, but this is, you know, this transaction was something that we've been thinking about for many years at the Zebra side. You know, we've been quite, you know, intrigued by what the combination could do for us. So in about 15 months back or so, we started the process by, you know, engaging with Greg Brown and Motorola to really see if there was a possibility for us coming together.
But we felt that there was so many great things that we could do together, as a single company rather than as two partners, that this was something that was worth really going after and spending the effort to get done. First, you know, we are working, we have been working side by side with you know, same account teams with our largest customers for many years. So we've been, you know, we've known the same customers, we have known each other on the go-to-market side, and we've had very complementary solutions. So by coming together, we can now become a, you know, a larger, more significant partner to our customers. And I've yet to meet the CIO who doesn't want to have fewer, but more relevant suppliers.
It also sets us up very nicely for some longer term trends around mobility, Internet of Things, and Cloud Computing. I'll talk a bit more about those also, but that's where the big opportunity I think is coming. And we believe that with this combination, we are really setting ourselves up to be viewed by many of our customers, the CIOs, as the first port of call they have, they will call when they have any issues in our space. You look at the portfolio of our products now, you can see that there's very little overlap. There's basically no overlap between our different solutions.
You know, we are a clear market leader in mobile computing, scanning, printers, RFID, and some other areas, like services and supplies, so very, very large businesses, and nobody is a clear winner. Nobody has a very high market share, but we are among the largest in services, supplies, and software also for, within our space. So we have a very strong, compelling offering to our customers. And we'd say, where we do have overlap is on the go-to-market side. You know, we do serve the same customers, the same partners.
If you look at statistics of what drives value in a combination like this, you know, that's the fewer steps away from the core you have on your customer side, if you deal with the same customers and the same buyers within the same customer groups, that is a great determinant for, you know, success in transactions like these ones. We have a great story. Here we have a slide on a little bit of what we can do in retail. You can see we have a number of different opportunities to serve retail sides, ranging from mobile computers, printers, scanners, card printers, services.
So, we have, with our largest customer now, the combined company we talked about, you know, traditional Zebra being well over 40 different applications. Now, with the combined company, we're probably doubling that number of applications. We, you know, we're very excited about what we can do in the short term, the growth we can drive by just simply executing stronger, executing better. But I think the real opportunity for us is to see how we can help transform the industry from AIDC, which is the traditional, you know, barcoding industry, to EAI, Enterprise Asset Intelligence, and how we can really, you know, help improve visibility into our customers' operations.
Now, you know, we're trying very hard to get visibility solutions that can help drive greater productivity for our customers, but also improve customer service levels. So we try to have, you know, real step function improvements in that productivity for them. So we do first enable our customers to, you know, sense what's happening in the physical world, so have a good understanding of what's actually happening there, and then take that information and analyze that to make sure we can provide something that's actionable, and then, you know, provide different people or tools to be able to take direct actions on what we have sensed then, you know, being sensed, then analyzed, and action taken on.
So we have a closed-loop activity like that, where we can really help automate and do a lot of edge analytics to drive a lot of improved performance in our customers' operations, particularly, I would say, in retail, for this case. I mentioned earlier that we have three strong global growth themes around mobile, cloud, and Internet of Things. And here we have Gartner put out, every year they put out the list of the top 10 technology trends. This is the 2015 trend. And as you can see that, you know, eight of those 10 trends have a direct bearing on the three themes that we see that we have an opportunity to work on. So this kind of makes it a little bit more concrete.
If you talk about, you know, cloud, mobile, and Internet of Things, some abstract, but here you can see computing everywhere, you know, definitely something we, we help with by providing mobile computers that can be used in all sorts of environments, have connectivity in all sorts of environments. Cloud and client, cloud and client computing is very much the same thing. You know, the vast majority of all the applications that we support are cloud-based, so we are enabling cloud of applications to get the reach into new retail facility or other industrial settings.
You know, Internet of Things, that's a whole category by itself, but you know, a lot of things that we do, you know, the NFL example I mentioned earlier, is probably a great one for really talking about how we help connect otherwise dumb things to applications and internet. So you can see that there's a whole raft of underlying specifics that really talks about support our thoughts around how we can get great growth out of mobility, cloud, and Internet of Things. So I said, you know, earlier, you know, what we do for our customers, is that we help our customers increase visibility into their operations. And we do that by providing a digital voice to their most important assets.
That voice can be in the form of a barcode, most foundationally, passive RFID, active RFID, NFC, Bluetooth, you know, all sorts of different technologies. But we can then, you know, take that voice, listen to that voice, translate that, or analyze what that, what that says, hand it over to wireless LAN network, and all, all the way up to different types of applications or, or, or the internet. And by doing that, we enable our customers to get much more timely information, and with that, they can also make smarter decisions on what's actually happening in, in their operations. So that's basically the, the, the, the high level view of what we try to do for our customers, and I'd say that's been resonating very well with our customers when we see them.
You probably, when you go through our booth today, you'll see a lot of other examples of how this works, and hopefully get a chance to run into some customers there, you can ask them. With this, I have my friend Girish come up.
Thank you, Anders, and good morning, and a happy 2015 to all of you. Good to see some old faces and get introduced to some of the new people covering Zebra. What I'm gonna attempt and do is provide you a window of the kind of customer meetings we are having and what we are hearing from customers. You know, starting Saturday, Joe Heel, Anders, and myself, we've had ample meetings already, and we have two very busy days ahead of us, and customers have given us a view of what they want to come and discuss. We are excited. This is our third month. We are coming in to close our third month.
The enterprise team, under the auspices of the Zebra team, is pretty excited, and you'll get to meet some of them as you tour the booth. So, you know, we've had this campaign since about 2011, which is, "Experience is everything." And this campaign focuses on balancing the needs and requirements of IT and operations, with a focus on the mobile associates in the retail store. Not overemphasizing the IT needs and not overemphasizing the operations needs, but the whole focus is on productivity and efficiency on the sales associate, on the sales clerk, on the inventory guy. And it's been resonating really well. Internally, and to some customers, I've been communicating essentially what we are hearing from our customers, that NRF 2015 is very different.
Some of you who've been coming to NRF for the last few years, this is perhaps the most important point I'll make in my segment, that for the last 3 years, you've seen us, and I've met some of you also, where we have come in with products and concepts and demos, and use case thesis and scenarios. And it's exciting to do that, and we'll do that on, you know, the next generation things, today as well. But NRF 2015 is very different from a standpoint that everything we have been evangelizing has been realized, it's been deployed at scale globally. And the examples would be, in 2011, we came in with Android, and internally in the business and externally with customers, Android was not resonating. People were questioning a consumer platform.
Now we have seven products, and we've seen—w e'll look back at 2014 as when Android happened in enterprise. So we've had a very strong trajectory of the Android portfolio in 2014. To be very honest, standing here a year ago, if somebody had told me this, this will be our realization of the Android portfolio, I would have been very excited. So across geographies, across retail, transportation, logistics, and manufacturing customers, we've had Android portfolio deployed. Ninety percent of the content of meetings in the past NRFs used to be around operating system, and that topic is less than 20% of the discussion time. It's about use cases, what you've done, how do we go and deploy on our premises?
Similarly, if you look at bioptic and MP6000, we deliberately stayed out of the slot scanner, out of the checkout flatbed scanner for the last three decades, and we let the incumbents play there. But then there was a thesis at the end of 2009, 2010, that with a single microprocessor, imaging technology, and the algorithms that we have, we have something to deliver to that space, and we, we launched the MP6000. And one of the most discerning customers worldwide is now into the many thousands of units that, that have been deployed, and late last year, we've had deployments as, as far away as Australia. So we are bringing productivity to the checkout counter. The third example I would have is, RFID has been the long promise that is coming, it is coming, it shall happen.
In textile apparel, we've crossed the chasm. RFID has happened. I cannot think of a textile apparel retailer provider who's not looking, deploying en masse. It used to be about, "Get me a couple products, let me try it out in the lab." Okay, we'll do one store, and we are in the hundreds and thousands of stores as far as RFID item level goes. You know, not boasting, but definitely pointing out that we were the innovators in item level RFID. That was our thesis, that RFID shall work in, in item level RFID, and that's a stable, deployed, robust use case. Just, you know, Wi-Fi and wireless LAN used to be all about, let's take inventory data and real-time pump it back to the, to the servers.
That dimension changed, and when in 2011 and 2012, we came in with user experience, guest access, being able to log on to the retailer's network. And that aspect beyond broadband connectivity of providing guest access and providing location services is the thesis of deployment for wireless LAN. And in addition, software and services. So to summarize this point, the building blocks of the industry transitions, the concepts, the products that we were leading over the last three years, you know, I'm very pleased to say customers are buying, and that's a great platform for us to go forward on 2015. So what are the trends in retail? Let's make it singular. There is a single trend that is the most profound mega trend in retail, and that is omni-channel.
And I don't know of a retailer, in this, hemisphere or in other parts of the world, who does not have an omni-channel channel strategy. Everybody's got a different one, and they're going about it in their own cultural ways. So omni-channel of tying in, your customer's experience, either that person's buying off of, their tablet, sitting in their living room or in a store, and how do you deliver that? That's the mega trend that retailers are dealing with. And as Anders mentioned, we find ourselves to be in a very unique spot. We bring the entire, edge portfolio, hardware, software, systems, ecosystem, to enable that.
When I talk to people in Omni-channel, either the industrial logistics portfolio is emphasized, that hey, Omni-channel is all about warehouse and delivering to your house, or the customer-facing application in the retail store. When you walk into a Nordstrom or Lord & Taylor or Saks Fifth Avenue here, how you're received is overemphasized. And our basis of Omni-channel offering is those two go hand-in-hand. So we have an industrial portfolio that is used, deployed, and shall be in warehousing and logistics for enabling a very smooth and streamlined supply chain. And we have customer-facing technologies, not only Android devices, but sensors that are coming in and Bluetooth LE, that Anders talked about, that are driving micro-locationing.
Not only that you're in the store, what section of the store you are in, are you in 4 m-5 m of that section? And then micro-locationing, oh, you are really looking at this item. And tying in order delivery either through the store or through a warehouse. So that's the mega trend that we are responding to, and as I look at our portfolio, we have an exciting, fresh, new, proven portfolio and more coming in in 2015 that responds to the omni-channel trend. Another subtlety that gets lost is the importance of the ecosystem and partners.
In a good way, the proportion of meetings we are having with the ecosystem partners this week is smaller because in the last couple of years, we were evangelizing, we were trying to court them, we were telling them to port their applications to our platforms. A lot of that has happened, and there's still wood to chop, but a lot of that has happened. So we are not showing up just with products. We have applications and manageability and security that we are showing up at the customer's doors. The other trend, especially in the U.S., has been the phenomenon of segments of retailing in the U.S. was, if I have the goods on the shelf, the customer shall come, and the customer shall buy.
That's transitioning to, I not only need to have goods on the shelf, I need to orchestrate a shopping experience for the customer that she comes back over and over again to my retail store. If you look at us, we were all about the inventory guy. There are two people in a retail store. There's the inventory guy, and then there is the sales clerk. If I have to look back over the last two decades of this entity, Zebra, the NewCo, has been overwhelmingly focused on the inventory guy. Let's make sure the inventory guy is efficient. Over the last three years, we were making a transition so that we equip the sales clerk with tools, information systems, mobility that drives a customer interface, and that's the transition from passive to active engagement that's happening in North America.
Europe was on a different spectrum. Europe, since the late 1990s, had a personal shopping system that they were equipping their customers with and already enhancing a customer experience because of sociological reasons. So there's a clear trend towards mobility. So the last three years, it was about Android, imaging, bioptics, item level RFID, guest access, social networking via wireless LAN. Those building blocks are there. And as we look at the next three years, there is new media coming into retailing. There are shelf labels, electronic shelf labels. There is a Bluetooth LE driving micro-locationing. There are kiosks. There are kiosks we have, we are installing with our customers.
These are digital displays that you can go into retail stores, you can interact, you can hit a button, and have a Voice over IP call with a product expert to enhance your shopping experience. There are beaconing and mobile coupons, and mobile coupons is a catalyst for our data capture portfolio. So there is this new media coming in, and one of the customers, a Dutch customer, said it well to me yesterday. "The next few years will be about tying in the platforms I talked to you about, Android and bioptics and wireless LAN and RFID, with this new media to have an integrated experience, a sensing, integrated experience." And for the next three years, I expect to come and talk to you about thesis and use cases and what customers are doing.
I'll run through a quick few examples. You know, we'll hold back the names of the customers, but some of you know who these customers are. So this is a big do-it-yourself hardware retailer in the U.S.—a nd it looks like a very interesting, you know, simple device. It's a very integrated experience. This mobility experience for this do-it-yourself retailer enables not only inventory checks, not only push-to-talk experience, not only voice-over-IP experience within the store and across stores, across geographies and states, but as well as payment. So if you have to rewind the clock back, was payment and voice-over-IP telephony being done in a retail store? The answer would be no. And the major use case thesis of this customer was, "Hey, I don't want to just look up inventory.
I want to drive a collaboration across my sales clerks. And by the way, Girish, if you're ready to make a transaction, I want to take your payment right there and then, versus you going and standing in a checkout lane." Tens of thousands of users all over across North America are driving that experience, and this retailer, do-it-yourself retailer, has a competitive advantage with this solution against its direct competitor. A major southern retailer, discerning customer, they put us through fire before they select technology, and they are in the 15,000 rollout of units of MP6000. Look at when you have gone to the grocery store, the grocer, the hypermarket, the mass merchandiser, productivity at the checkout stopped being a battle in the early 1990s.
They, they deployed the analog scanners, and items were scanned, so productivity at the checkout counter had had inertia. What Bioptic, what the MP6000 product has done is, it has spiked the productivity at the checkout counter. It matters a lot, especially during holiday, holiday times. It's also driving an energy-efficient, digital experience that matters today in 2015 and more, and going forward, more so than, than it did before. We announced this, we showed this about a year and a half ago, and it continues to be a very unique offering. I, I talked to you about wireless LAN, and it's all about guest access, about location services, besides broadband connectivity, and that's the discussion. The discussion is not about, you know, how many, you know, gigabits, megabits per second, what's the bandwidth?
It's all about how do I enable the wireless infrastructure to be appeasing to my customer. This one, I can't help myself but name the customer because we've done that before, and it's Hallmark. And it's over 14,000 Android devices deployed on SAP applications with Afaria device management. And if you talk to Hallmark, the 38 or so, so far, capabilities, features we've added on top of Android, was the determining factor, was the determining factor to deploy TC55 in the mobility mass merchandising application of Hallmark. And we are proud of this customer and what they've done. My last example is of an omni-channel example, another omni-channel example. Here's a retailer, the thought is, if you're going to do omni-channel, you need to go and build warehouses in Nebraska.
What we've seen over the last 18 months is, retailers are saying, "My retail store is a warehouse. So if I take an order in, in Long Island, in Manhasset, I'll use my store in Long Island, Manhasset, to do picking, kitting, and shipping." But what happens is, when you do an inventory check, when items come into the retail store, that's 11 days old. I don't know where those items are, and there's a delay in omni-channel velocity and trajectory. What RFID is doing with real-time visibility of those items, is speeding up omni-channel delivery. And this is a great application that's gaining momentum. Before I hand it off to Curt, you know, this is a study that Zebra had initiated, and I'll say I was pleasantly surprised with the conclusions that came in.
The highlights of the conclusions were that almost all the respondents in the industry were saying, "We are looking to make changes. We want to do IoT. We are looking to make changes." I was personally very surprised that almost two-thirds of the customers said: "You know something? I'm dabbling in it. I've made some investments in IoT. I've made some investments in sensors." The third conclusion, people think about IoT as these little emitters that have nothing to do with mobility, and what customers are saying is, "It's an integrated experience." So mobility and real-time location systems with IoT is a harmonious, integrated experience, and that's what I'm seeking. Let me close with that. At this stage, hand it off to Curt Croley, who's on our industrial design team.
Hello, everyone. Good morning. By the way, I have to have props here, so, I'm delighted to be with you today. And, what I'd like to do is I'd like to share with you some secret sauce. All right? I usually don't get a chance to kind of, like, highlight some of the things that we're doing that are very different from some of the consumer-grade devices out there. So, let me walk you through some of the things, and, we'll take it from there here, you know. As Girish and Anders mentioned, if you look at the diversity of our customers, these are customers who are leveraging our devices to enable their business. Imagine that, you know, they're trusting their business, their revenue, their productivity to our technology.
You know, it's a responsibility we take very seriously, right? And so, you know, oftentimes, you know, in our normal lives, you know, we might find ourselves not having kind of, like, connectivity, no bars, you know? It's very easy for us to say, "Okay, I'll just sort of, like, search around for that," you know? But if I've got my revenue hanging off of that, that transaction where I need to have that connectivity, that's just not acceptable. And so some of our devices have redundancy in this regard that allows for that continuous connectivity, even in the canyons of New York City here. So think about the idea of, like, the supply chain complexities of same-day delivery, same-day, faster than same-day delivery.
The idea of, like, ship to anywhere on a, you know, in an ever-increasing sort of velocity. These are the type of things that Zebra is doing to help, you know, our technologies are helping to enable that, right? So this is really about new levels of customer service and value. And this is really how we differ from other devices out there, is we're helping to enable all that. It's very exciting. Now, the reason I put up these images here is it's not a homogeneous customer base. This isn't about kind of, like, checking email. This is about kind of, like, enabling productivity, enabling new levels of customer service. But I'd like to highlight, that's our device right there, you know, on the cart in the middle of this massive warehouse.
And so the reason customers choose us is because we're helping our customers be better, whether it's delivering new levels of customer service or new levels of productivity in the warehouse. Now, here's the secret sauce here. If there's one message that you guys take away from me today, it's that the intimacy with our customers is helping us, helping Zebra, deliver new and different and more high-performance value than anybody else, right? And so our performance design philosophy is really not about designing, like, the aesthetics of the device. You know, our devices are appropriately, you know, designed for the markets we serve. You know, there's certainly, like, slicker devices out there, but for these markets we're serving, these are appropriate to deliver the productivity and customer service. And the idea is that we go deep with our customers.
We co-create with our customers. We try and understand what problems they're trying to solve, and then we do it better than anybody else. So that's enabled us to achieve, with many of our key customers, what we call a trusted advisor status, where they're actually asking us to come in and help them deliver new levels of service. You know, a good example is a large retailer in the U.K. had an overnight workforce of 95,000 employees that they just simply did not know what levels of productivity these folks were doing on the overnight. We came in, and we helped instrument that with our devices, to put a little technology in their hands to help provide additional visibility to that retailer, and to understand where that workforce is and what their levels of productivity.
If we could take the best employee at that retailer and make it the new average, then we just sort of, like, helped that retailer bring new levels of productivity and value to their shareholders. So the second message I'd like to share with you is that we have fabulous, fabulous technology under the hood. The idea that we are configuring our devices in a way that allows our customer to make an investment and then scale that investment over time helps protect our customers' investment in that technology. The idea that there's an ecosystem of accessories around the product that allow them to do multi functions, multi utility out of one investment in the device. And it all comes together with the superior engineering and design that we're bringing.
I'd like to share with you a couple of examples of this, right? So, for instance, you know, this is one of our products, the MC40, and the idea here is that just absolutely a fabulous. You'll see it. It's absolutely a fabulous product, very substantial. The designed to survive kind of like the most rigorous environments, but also designed to have both a payment and a non-payment version based on the same investment. So when we think about holistically, a strategy of system-level thinking, we can kind of like make an investment in a device and get a lot of utility and a lot of different functionality out of the products. So I like to think of it as enterprise DNA with a distinct design edge. You won't see it in any other products out there.
So I mentioned systems thinking. When you think about the topics or that Girish and Anders mentioned, right? Drilling down, how do we make this happen? It's not just about the device. It's about this ecosystem of accessories that takes a center point device and kind of like scales it across a business. When we're talking about our customers, we're talking about fleet deployments of tens of thousands of units. How do you manage just those devices? How do you manage, kind of like, these devices being continuously in use 24 hours a day? It's not just casual use. This is, like, heavy duty use.
The idea of kind of like replaceable batteries, but even to the point of kind of like massive backroom configurations that allow our customers to understand and organize their workplace. We're helping them do that. I'm going to actually show you. So Girish mentioned the TC70, fabulous product, all right? You'll see it at the show today. A good example of that is this. I've got a configuration, which is what we call kind of like a pistol grip form factor for high-volume scanning. But by actually cleverly creating a device, we can actually create a variety of utility out of the same device, such as this here.
In addition to that, what we've been seeing over the last 2 or 3 years is the shift in retail of the power of our technology is such that our customers want our technology to help extend their brand. So it's not about the Zebra brand, it's about how do we help our customer's brand, especially in high-end retail and other place, to be the best that they can be. And so, very, very beautifully, elegantly designed with new levels of experiential value at a point of sale. This is what we're all about. So I'd like to leave you with this, you know. This is kind of my view. I'm starting to see it all click together here.
As you look at the intelligence that is manifesting in the businesses around, around the device with the, Internet of Things and locationing strategies, we take the superior devices that we have, you can start seeing all the tumblers kind of click together, and we can now deliver new levels of value, new levels of intelligence on those devices that enable our, our customers to deliver more and superior levels of customer service, as well as guided training, directed picking, so we can see, like, new levels of amped-up value in the years to come. So I'm just going to sort of leave it at that here and say thanks.
Okay, so, let's see. So we're on to Q&A here. First of all, I'd like to invite Anders and, Girish and, Curt, and then Juliann, if you could come up and, join us on the stage here to get ready for Q&A. While they're coming up, I'd like to summarize a little bit about what we saw here this morning. First, Anders, in his presentation, you know, talked about Zebra as a combined— the combination of the two companies, and really now being able to lead the industry in terms of moving toward enterprise asset intelligence, which is going beyond just merely the identification of an asset, but really providing actionable intelligence around enhancing their business.
And that we are very well positioned with IoT, with the Internet of Things, the cloud and mobility. And Girish followed, I think, in a very important way, around the positive trends that we are seeing in retail. And the things that we presented as separate companies before, of concepts, a few years ago, are now really becoming reality. And there is a true investment, a true mindset among retailers for the investment in omni-channel to drive enhanced customer service and improved workflow for their workforce. And we have the differentiated products that stand us apart or set us apart from the competition in the space.
I think Curt did a really nice job at the end to really see how deeply we think about the products and our focus is really on the enterprise itself, and how it's not just the product, but it's really about the ecosystem. I think sometimes people might forget about that. It's not just the product, but it's about all of the things around the product that enhance that value to the customer, and how Zebra is really focused on that element in particular to drive better value within the products and position the company so that we are just ahead of the customer, so that when they're ready to adopt these technologies and adopt these solutions, we're there already with them. With that, I'd like to open it up.
We have about 10 minutes for some Q&A here, and we have up here our panelists, along with Juliann. So, why don't we kick it off with Keith?
I appreciate it. So Gary, you talked a little bit about last year, especially for this year thus far. Can you talk a little bit—t hank you. Can you talk a little bit about, the thought process the retailers have come to? Have they made a determination that Android is perhaps better? And then, if they have made that determination, what's the process from them migrating from their operating system of Windows over to Android? Is it easy to do? Is it difficult to do? Is there a lot of back office things that has to be done?
So, Keith, the retail sector, and, you know, there are exceptions in their segment. Retail sector seems to be embracing Android, and it's not a conversation topic anymore. They are deploying modern applications, browser-based applications on the devices. What we have also done is we've taken the most important legacy application, which is the inventory application. Still, about half the customers out there are using mainframes and VAX mainframes and AS/400 applications. We've taken those, and we ported them over to, with our ecosystem partner, to Android. So we are carrying the legacy application forward, which is the basic, and then customers are deploying browser-based applications or Android native applications. There is work to be done. There is some rewriting of the application outside of inventory.
But most of the experience, if you look at the MC9100, which is the meat and potatoes of the mobile business, and the TC70- The MC9100 runs one application fabulously to run your warehouse and retail store. TC70, there is no limit of applications, so there are a lot of new experiences and applications being added to it. In direct store delivery and transportation, we are seeing customers starting to transition. The discussion is moving beyond security and manageability because the ecosystem and our capabilities have come up. But there is, there is work to be done, on that. But the convincing, Android is good for you, use Android, you'll be okay with Android, I'll hold your hand, that, that conversation has moved on. It's about deployments, more stores and, and others.
Great. Thanks.
Yeah, thank you. You talked about seeding the infrastructure to get.
I did? I'm sorry.
For passive RFID when it finally got out of its 10-year gestation period. What are you doing toward seeding the infrastructure toward active RFID, as—a nd what changes, what investments, how long it's going to take? And also what advantages do you get out of active RFID?
Summarize?
So, the question that Jeff was asking is, if we see that the market around passive RFID, but what's the future for active RFID? And, what are we doing to enhance the growth opportunities for the next phase?
Get it to a point which is, it's reliable. Where there's an ROI.
All right. Minor detail. So on Active RFID, you know, we have been active in Active RFID within the industrial space, so particularly automotive, for quite, quite some time. You know, the NFL opportunity was a real opportunity for us to create a new vertical for this, a sports vertical. And I think, you know, so that's obviously a financial benefit to that also to us. We get revenue and profit. But it really has done something, you know, on the marketing side for us. NFL talked to us before we kind of signed about the value of the shield, and we were a bit skeptical for a B2B company at how much that really matters.
But, you know, we've had a number of customers come to games to show them, you know, game day operations, how the system works. They, you know, get to watch some football, too, but primarily to show them the system. And that's led to some two large orders for us from that in other, more industrial, but not automotive, so aerospace, and one is actually in healthcare. So I think we've seen a pipeline that's grown very substantially over the last 12 months, 18 months for location solutions and Active RFID. And it's a small part of our business, so I think we can say without, you know, too much ado, that we had a very good year, you know, good growth year-over-year in Active RFID this year.
I'd say also that the, you know, we've seen some examples now of the benefit of being together with a broader company. Our location solutions team were engaged with a customer in the Middle East, a large car dealership and a lot of services and that. And they went in there with and intend to offer an active RFID solution. So it was basically to track the cars in the dealership. So you go from, you know, new cars to know exactly if they had, like, 1,000 cars in the dealership, where are these cars? You know, how do you find them?
Also for service, that they will be able to have an automated thing say, "Now, the car is now going into, to what car wash, you know, so you should be able to pick it up in 15 minutes or something." But when, when they came in there and started talking, they actually found out that the better solution was passive RFID. So our LS team, our active RFID team, sold, a number of more, you know, enterprise RFID, passive RFID scanners, so, and other passive RFID printer encoders from Zebra, and they provided some services themselves. So the sale ended up being something totally different, but by having the broader portfolio of products, we could actually be much more tailored to what that customer wanted and offer something, something more unique and, and, and, more, more valuable to them.
We see it as being very, you know, having a good future for us, I think.
Boy, there's a lot, a lot of Jeffs. How about Jeff Kvaal in the back there?
Thanks, Doug. It's Jeff Kvaal from Northland. A lot of the former competitors from the enterprise side will talk very aggressively about what kinds of activities they have in the retail space. They talk particularly about the public-facing enterprise as a bit of a new market for them. To what extent are you seeing your share in Wi-Fi? Is that solidified now? Is that something that you are consolidating a little bit? How should we think about the competitive landscape in that portion of the business?
So, it's always tricky, how do you answer the question on other competitors? You know, in retail logistics, I was talking to some folks outside, our competitive advantage is, our relationships with customers worldwide. So, you know, if you are—if you, even with all the acquisitions you can make, in the competitive world, it's difficult to replicate, the, the tall wall we have of customer relationships that are out there. From a portfolio standpoint, having a balance of, of a logistics portfolio and customer-facing portfolio has been a competitive advantage. But we have viable competitors out there, both in our industry as well as coming in from—t he consumer segment, and we need to be on our toes to drive our proposition, which is what we've been doing year after year basis.
On Wi-Fi, maybe Anders can add more to it, but we operate in our verticals on the Wi-Fi and the Wireless LAN market, which happens to be primarily retail, hospitality, and transportation. And we have the coveted brand names worldwide as our customers in the Wireless LAN. Our thesis, our proposition in Wireless LAN is mobility. It's not about Ethernet, it's not about wired, it's not about we'll bring internet to you. We do a lot of that. But it's all about we will enable mobility in a highly resilient, efficient, aggressive work environment, that is a warehouse, that is a tarmac. And, we generally hold our own in those segments. Anders?
Yeah, you know, generally, I'd say, you know, our competitiveness in any vertical market, from, say, retail, particularly, you know, we look at the historical Zebra, we've always been very focused on making sure we can gain some share. It doesn't matter what the market does, you know, if the market is good, market is bad, we wanna be able to do a little bit better than the market. We wanna take some share, and I think we've been able to demonstrate that we've been able to do that over quite a few years. I'm not sure if there's been a lot of, you know, really fancy strategies or so. I think it's been probably more very, very thoughtful execution of our strategy.
You know, I think we've been doing the right things, but we've been executing on it very well. And I'd say, you know, as a combined company, we obviously will have o ne, you know, we didn't have any scale competitor before. I think now we have a more of a scale competitor with Honeywell, and we will, you know, we will certainly engage with them. They're a respectable competitor, but, I think we have - we believe we have, you know, we have leadership in all our product categories. We have a higher market share. And I think the focus that we can drive the business with now will put us in a different category of competitor, I think. And we wanna make sure that we engage very, you know, thoughtfully with them, but not leave money on the table.
And specifically, to the Wireless LAN, I've said, you know, we're obviously not the market leader in Wireless LAN, but we are the number one or two in the sub-segment, in the verticals where we compete. So you look at the, you know, retail, hospitality, and transportation logistics, you know, we will be number one or two in each of those verticals in North America and globally. So, and my sense is that the Wireless LAN market is becoming somewhat more vertical and a little less of a horizontal play, more software going into it, more tailored solutions.
We know from our competitors who, you know, all would like to get into retail, but how hard it is to penetrate our accounts based on the relationship we have with our customers and the knowledge we have about the use cases, and how we can tailor those specifically to our customers. So, you know, we are working very diligently on making sure that we, you know, have a thoughtful strategy that we can execute, that's realistic, and it—b ut it's not going from where we are to being, you know, the overall market leader. It's probably gonna be more focused on making sure how do we secure a stronger position within the vertical markets that we already play in.
Yep.
I'd just like to add something to that. If you, if you are planning on coming to the, do the tour this morning, you'll see that vision brought to life, and we think about it in three dimensions, from enhancing the shopping experience. One is around self-service. So if someone comes into the store, how can they get what they need if they want to simply interact with a kiosk and ask some questions, not just check inventory, but have a real-time conversation with an expert? The second area is around empowering the sales associate so that they can provide a better experience for the end user. So you'll see several examples that we're demonstrating today of how our customers are using our technology to make the sales associate better able to really focus on the customer needs and what they require.
Then the third dimension is providing that one-to-one recommendation. So you'll see an example from an apparel perspective of how, depending on what you choose, using some of our technology, our, our customers can make recommendations to their customers on things that, you know, match that last pair of shoes they bought. So you'll see that vision in action today along those three dimensions.
Okay, we have time for one more question. And just so you know, all the executives will be over at NRF, so you'll be able to obviously meet with them and talk to them as well. One more question, and then I'd like to ask you to come up to give some direction on how to get to the bus, etc . So go.
Girish, can you hear me?
Yep.
Yeah. Girish, I wanna follow up on Keith Housum's question. When you were saying there's still more work to do on Android in terms of applications, I think you were saying. So because of the fact that in the past years there's been work to do, your customers have had a dilemma, which is it was time to upgrade, and they have these mega trends they wanna be able to build applications for, and they haven't known which direction to go in. So when you say there's more work to do, is that dilemma still there so they have to delay further the upgrade that they've been wanting to do, or, you know, or can you speak to that? Is the upgrade cycle able to happen now?
The upgrade cycle can happen now. When I say there is work to do, what I'm saying is the job is not done. Job is somewhat never done. You port applications, you add capabilities, but there is a dramatic, distinct difference between what was the job that needed to be done. We have one product on Android, and we don't have manageability, security from ecosystem or applications on it. That was the job 2-3 years ago. Today, the jobs that are done is we have seven products announced and more coming this year, an integrated portfolio with a harmonious developer experience that's out there. We have device management and security from ecosystem partners, ported and scaled, and we have at least about 147 applications that we counted that are already running on it.
So, I—t he impression that I'm trying to leave you with is we are not in 2012 or 2013, as far as Androids go. As Anders said, Android has proliferated verticals and geographies. I also don't want to leave the impression that it's done. No, we still have work to do, you know, of holding our customer's hand, getting their IT operations, applications moved and further proliferated on Android, but it's a different, you know— Yes, sir.
Can you therefore segment which customers can go now and which customers might still be held back because there aren't enough applications written yet?
So, the portfolio and it's, it's really the customer's decision. From a portfolio readiness and application readiness standpoint, across verticals, across geographies, customers can go now. There are customers who have native legacy Windows applications, and they want exactly that functionality in the new environment, and there are a few, not many out there now, who will have to port that stack over. That work they'll have to do with our help. But many customers have moved beyond. They are into browser-based applications. They were on browser-based applications, even on a Windows platform. Let me close by saying the portfolio readiness, the solution readiness is mature and ready to go, and that's why we have tens of customers deploying Android. Anders?
Yeah, just two quick things. First, if you asked any of our product leaders, are we done? You know, they have a list of things that they want to get done, so nobody is ever done with anything like that. But, I'd say from from my perspective, you know, when we started a year ago, the due diligence of the enterprise business, you know, one of the things that we really liked was the investments that had been done in Android. But it was, you know, the market traction wasn't quite there. So in 2014, I called it the year of Android. You know, it was really what—y ou know, we felt that that went from being a question mark to an exclamation mark.
And particularly in retail, transportation and logistics, those are the two big markets that we've seen it. Services to some degree also, field services also. So it's not every vertical, it's not, you know, and healthcare. Healthcare. So it's starting to proliferate more and more different verticals. I wouldn't say every vertical is at the same pace, but certainly some of the larger volume ones are switching to or seeing Android as a very as a perfectly fine alternative.
Okay.
With that, we're gonna close out this portion of the presentation. Thank you all for this, for coming, and let me turn it over to Amy to give you some direction on how to get over to NRF.
So we've organized a private booth tour immediately following this session. We have shuttle buses that are outside the lobby. It's important that we stick together as a group. This is pre-show hours, so we have passes that we need to provide to get you into the center. So please stick together. We have three shuttle buses downstairs. If you do not have your NRF badge right now, please stop by the table that's right outside these doors. We'll be separating into six groups once we get to the center so that we can do tours simultaneously. Thank you.