Kind of on new solutions and new use cases. So overall, I would say that we anticipated large deployments kind of starting to come back. We anticipated in retail. We want to see more of that across manufacturing and T&L. As I said, we’d like to see more of it to in kind of different size deals, so mid-tier and run rate deals come back a bit. But I would say, overall, we’re — our engagement with customers have been encouraging. There’s certainly uncertainty remains around timing of some of the projects. I think Nate covered that earlier. And I think it’s reflected in our year-end outlook overall.
Nathan Winters: You see it in the pipeline in terms of where the deals are at in the deal stage. So you qualify versus where we’d like to see them more in the validate secure. So earlier stages of the funnel, particularly in the second half, than where we’d like to see it at this point in the year or relative to what we’ve maybe seen in prior years.
Brad Hewitt: Okay. That’s helpful. I think you guys had some retail orders that you expected to convert to revenue at the end of Q4 that were pushed into Q1. Would you be able to quantify the magnitude of that deferral? And then when you talked about the uptick in the large order activity on the retail side, was that inclusive of some of that year-end spending? Or was that a separate bucket?
Bill Burns: I would say that year-end spending across retailers that their years and differently, whether it’s the truly year-end or into first quarter. So I think we typically see orders that bridge both on an annual basis. So I don’t think there was much that move between Q4 and Q1 as much as just customers need product before they have their year-end from a retail perspective. And again, I think those are all encouraging signs, whether it was Q4 or Q1 to us, the retailer start beginning to buy again. And I think we continue to want to see more of that momentum. I would say that even those orders are measured. You know what I mean, so it’s — it was year-end spending but it was the first phase of a project and we want to see those continued projects moving forward and we believe they will.
So I would say nothing really in movement of Q4, Q1 as much as just normal activity around that, where some customers in retail ended the true year-end, December 31 and others in the first quarter.
Operator: The next question comes from Jim Ricchiuti with Needham & Company.
Jim Ricchiuti: Maybe I missed it. Did you comment about the activity you’re seeing in the SMB market? Is that — is the recovery you’re seeing in ports to retail, also impacting that part of the business?
Bill Burns: I would say that SMB would fall kind of in this mid-tier to run rate business. And I think we’ve seen, again, more recovery in large opportunities. I think we’re seeing optimism clearly on the part of our partners and our distributors. That business will continue to progress and get better through the second half year. But I think at the moment, we have not seen the uptick we’ve seen in large orders across mid in run rate business which really falls in this SMB category. So I’d say not yet. I would say there’s optimism on the part of our partners but I think that we want to see more of that. As large orders typically are the first to decline or the first to recover, retail was the first to pull back and now we’re seeing it first to recover. And I think that SMB, call it, mid-tier and run rate business will follow.
Jim Ricchiuti: Got it. How would you characterize the RFID business in the quarter, level of activity you’re seeing and just the trends in that business, we’re starting to see more activity, it sounds like on the T&L side with the big customer moving out of the distribution center into the package delivery side of the business? How would you characterize RFID for you?
Bill Burns: Yes. I would say RFID, clearly, we see as an opportunity in across multiple verticals now, not just retail and retail apparel, where it was originally focused and we’re clearly seeing opportunities across track and trace and supply chain. You mentioned parcel tracking with the transportation logistics, airports and airlines with baggage tracking inside manufacturing work in progress in tools and over. So a whole series of different applications we’re seeing, quick-serve restaurants. Clearly, the move ahead of large retailers like Walmart or UPS smart package initiatives are causing others to continue to look at what they’re doing in RFID and move things along across multiple industries and verticals. Zebra has the broadest and deepest set of RFID solutions in the market today.
So whether it’s fixed or handheld readers, industrial and mobile printers, our software that we utilized to — for reads and locates and then our labels printed through our printers. So we’ve seen strong growth across the portfolio over the past few years. We continue to see the drivers being the fact that the technologies continue to improve with greater rerate accuracy across the development of new tag types that make that more efficient in the reading of the tags. I think we’re seeing more software applications being available today of serving these different markets. We’re — clearly, overall, the idea that the number of tags, I think what excites all of us is the fact that readers follow tags, right? So from our perspective, that the adoption of tags and source tagging of items at that point of manufacturing, the number of tags being sold is certainly going to allow more applications of those tags in customer environment.
So we remain excited about this space overall and I think we’re going to continue to see growth across RFID.
Operator: The next question is from Joe Giordano with TD Cowen.
Joe Giordano: Just — I know people are hesitant to lay out big capital still, like you said a couple of times. But as you get into like next year, just considering the large-scale increase in your installed base that happened in the immediate aftermath of COVID. Like should we be thinking refresh cycle is kind of like in play for 2025?
Bill Burns: I think overall that the EMC clearly, across mobile computing is really what you’re talking about in kind of large refresh cycles. And as I’ve said a couple of times already, we’re seeing that as the first signs of recovery. And really in retail to start, I think that the customers in have begun to absorb their capacity, certainly in e-commerce. We’d like to see that happen across T&L as those customers build out a lot of capacity as well during the pandemic. And we’d like to see manufacturing be a bit more healthy in the idea that moving from a services-based economy to more goods-based economy overall. I’d say that the refresh cycle, our sales teams are focused on that with our customers. And ultimately, mobile computing — mobile computers are essential that are operation, they have worked with us across multiple generations of products.
