Zebra raises handheld prices about 15% as memory costs climb

The news

Zebra Technologies raised prices on its mobile computers by about 15% in October to offset rising memory costs. The increase varies by product line and region.

The price increases covered about $25 million of the more than $50 million increase in memory costs from a year earlier in the third quarter.
Customers “don’t like the price increases,” CEO Bill Burns said, but understand they need to keep investing in technology.

The details

Zebra expects its additional memory costs to reach about $145 million this year, up from its earlier estimate of $120 million. The increase is entirely due to higher sales of mobile computers.

Memory prices are still rising, although more slowly than in the middle of the year.
Zebra expects them to keep rising through the first half of 2027, before increases slow in the second half.
The higher costs are already weighing on margins. Zebra's adjusted gross margin fell 2.2 percentage points to 46% in the third quarter, mainly because of memory costs.

The October increase follows an earlier round of price hikes that took effect in late March. Zebra expects the latest increase to have a modest effect on fourth-quarter results and add about 1.5 percentage points to sales growth in 2027.

The company has seen no revenue impact from customers buying ahead of the increases.
Inventory rose about $90 million from the second quarter, driven by memory supply and some pricing.
Zebra has qualified five new memory suppliers and expects to add two more in 2027.

Demand for Zebra's devices remains strong despite the higher prices, particularly among transportation and logistics customers. Third-quarter sales rose 22.3% to $1.61 billion. Excluding acquisitions and currency effects, sales grew 11.3%.

Transportation and logistics was the company's fastest-growing market in the quarter. Global device refresh rollouts with these customers are expected to begin in 2027.
Its Connected Frontline segment, which includes mobile computers, grew nearly 35% to $949 million, or 15% organically.

What peers are doing

Honeywell raised list prices on its mobile computers by 5% to 15% from June 1. Some models, including the CT30 and EDA56, were excluded from the increases, distributor Jarltech told customers. Honeywell also raised barcode printer prices by 5% and industrial fixed scanner prices by 15%.