Medtronic, Inc. (NYSE:MDT) today announced record revenue for the
quarter ended January 27, 2006, of $2.770 billion, a 9 percent increase
over the $2.531 billion recorded in the third quarter of fiscal year
2005. Medtronic's implantable cardioverter defibrillator (ICD) revenue grew 21%, and the Medtronic CareLink Network continued to expand, with close to 60,000 patients now being monitored by about 750 clinics. Medtronic is more aggressively investing in R&D; spending increased 16% to $280 million, or around 10% of company revenue for the quarter.

I've been watching Medtronic's adoption of wireless technologies for some time - they are well positioned to extend their implantable device business into remote monitoring. But the transition won't necessarily be easy. The first challenge is organizational; a number of different product groups are adopting wireless - cardiac rhythm management (Concerto AT), neurological and diabetes business units (Pain-Control Pump/Personal Therapy Manager, and Guardian RT System). Given the potential benefits of wireless connectivity, I can only imagine the number of other early stage projects underway, and the potential for duplicate efforts. Patients and physicians will expect technologies, features and even products (like back-end applications, servers, cell phones and PDAs) to be common across all of Medtronic's wireless solutions - getting development groups to agree on a common direction can be, ahem, difficult. Making the right technology, standards and vendor selection decisions will also be critical to their success. Finally, connectivity will require adjustments across their business delivery system, impacting requirements gathering, R&D core competencies, regulatory strategies, marketing, sales and sales administration, manufacturing, service and support.

Being a large public company, we'll all have a ring side seat to watch Medtronic transition from an embedded/implanted system business to one that generates a major portion of revenues from general purpose computing platforms (hardware/software for servers and hand held devices) made up of third party devices and services (like cell phone carriers). If they don't have a comprehensive wireless business plan that encompasses these areas, then product delays, unanticipated costs, and possibly customer dissatisfaction will result. If you'd like a little help (or a lot), give me a call.