How Could Symantec’s Norton Benefit from LifeLock’s Buyout?

norton

In the previous part, we discussed Symantec’s (SYMC) latest acquisition of LifeLock. PC (personal computer) shipments fell for the eighth consecutive quarter in 3Q16. Gartner said that this was “the longest duration of decline in the history of the PC industry.”

Let’s discuss how this acquisition is going to enhance its Norton AntiVirus product. The continued sluggishness in the PC market impacted Symantec’s consumer security offering, Norton Security Suite, which is primarily focused on PC-based security solutions.

The sluggish PC market not only impacted Symantec but also compelled IBM (IBM) to exit the PC space by selling its server business to China-based (FXI) Lenovo (LNVGY). It also forced HP (HPQ) to split. It is the IT (information technology) sector’s changing focus from the PC market to the SMAC (social media, mobile, analytics, and cloud) revolution that led Microsoft (MSFT) to adopt its “mobile first, cloud first” strategy.

LifeLock to complement Symantec’s Norton AntiVirus offering

Once the acquisition is completed, Symantec aims to integrate LifeLock with Norton AntiVirus. In its fiscal 3Q16 earnings release, LifeLock had 4.4 million members, an increase of 8% on YoY (year-over-year) basis. LifeLock’s customer base will add significantly to Norton’s customer base of 50 million users. CNBC, citing Symantec CEO Greg Clark, stated, “(Norton) had been declining with the declines in PC market share. This acquisition brings $660 million in revenue to the consumer business and returns it to longer sustainable growth.”

It appears Symantec hopes that the LifeLock acquisition will be accretive to its position in the cybersecurity space. In the acquisition press release, Clark stated that “With the combination of Norton and LifeLock, we will be able to deliver comprehensive cyber defense for consumers.”

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