How Is Motorola Solutions’ Avigilon Acquisition Faring So Far?

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It has been roughly six months since Motorola Solutions (NYSE:MSI) closed its acquisition of Avigilon, a provider of video-surveillance solutions and analytics software. The deal was part of the company’s push towards diversifying its product lines beyond its bread-and-butter land mobile radio business, providing a broader portfolio of solutions for commercial and government customers. While Motorola Solutions doesn’t break out Avigilon’s results, the company noted that Q2 growth was strong, coming in at high-teens levels. The demand for video surveillance and analytics products worldwide is rising, and Motorola Solutions has indicated that its addressable market could expand to close to $12 billion (excluding China). Below we take a look at some of the trends that could drive the performance of this business.

We have created an interactive dashboard on what to expect from Motorola Solutions in 2018 outlining our expectations for the company’s performance over the remainder of 2018. You can modify any of our key drivers and forecasts to see how changes would impact the company’s results.

Motorola’s Distribution Reach With Government Agencies

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Motorola could see significant synergies, primarily relating to sales and marketing, as it continues to integrate the business, building new routes to the market. While Avigilon has historically sold video solutions primarily to small and medium businesses, Motorola expects to increase sales to government agencies, via its government sales team as well as its existing channel partners, many of whom have also sold video-based products in the past.  Motorola has been a long-standing provider of LMR solutions to the U.S. federal government, and also has deep relationships at the state level, which could help to improve the distribution of Avigilon products.

Avigilon’s Product Line

Avigilon’s new products and solutions could also help the company drive sales. For instance, the company launched a cloud-based solution dubbed Avigilon Blue, which enables video system users to manage more sites with fewer resources. The product could help the company open up new opportunities in small and medium-sized businesses. Avigilon is also investing significantly in implementing artificial intelligence into its products, introducing Appearance Search technology that can locate a person or a vehicle from video feeds. Moreover, Avigilon’s strategy of offering pre-engineered end-to-end solutions could also help the company boost software sales. About 20% of Avigilon’s revenues come from software.

U.S. Trade Dispute With China Could Play To Avigilon’s Advantage 

The escalating trade war between the U.S. and China could also prove advantageous for Avigilon. Chinese companies play a significant role in the surveillance hardware market, and it is possible that the current headwinds could help video surveillance companies based in the U.S. Avigilon operates a manufacturing facility in Plano, Texas, which produces Avigilon products sold into the U.S. market.

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