RFID Industry Activity on the Rise

Surging corporate activity signals investment community's belief in near- to mid-term potential of radio frequency ID market, VDC believes

Following provided by Venture Development Corporation (VDC), an independent technology market research and strategy consulting firm that specializes in a number of retail automation, radio frequency identification (RFID), automatic identification and data capture (AIDC), datacom/telecom and defense markets.

Alien Files IPO

  • Alien has never been profitable. The company's losses have doubled over last year, reaching nearly $53 million for the fiscal year that ended last September 30. With losses surpassing revenues ($19.8 million in 2005) and the company facing significant costs of goods sold, Alien's financial outlook remains uncertain.

  • Alien is challenged in predicting the future growth of the RFID market. The S-1 document reads: "In the past, both we [Alien] and other industry participants have overestimated RFID market size and overall growth rates. To date we have had limited success in accurately predicting future sales of RFID products generally and our RFID tag products in particular. Widespread market acceptance of RFID products in the application areas that we target is uncertain. To date, the adoption rate for RFID technology has been slower than anticipated or forecasted by both us and certain industry sources." While publishing these statements is understandable from a risk perspective, they unfortunately do not bolster the confidence of would-be investors.

  • Gen2 brings a new wave of competition. Alien was an early supply chain market leader via its proprietary Gen1 UHF offerings; however, as the retail consumer packaged goods (CPG) supply chain fully transitions to Gen2, the sea of competitors and alternative solutions will rapidly grow. In addition, the question as to whether Alien's Gen1 technology will become obsolete or remain viable for niche applications remains unanswered.

Lockheed Martin Acquires Savi

  • Savi will gain access to Lockheed Martin's GPS/satellite, sense/respond capabilities and command and control algorithms in support of advanced feature supply chain solutions, while Lockheed Martin will be able to provide RFID technology to its customers;

  • Savi's service offerings will be expanded/complimented with Lockheed Martin's core competence in software/systems engineering in space, air and ground systems, and Lockheed is expected to leverage Savi's supply chain and logistics security experience;

  • Savi will be able to increase market presence in its target markets, while Lockheed Martin will be able to capture more revenues from its core market by offering a more diverse product portfolio; and,

  • The influx of capital, technology and manufacturing expertise is expected to spur innovation for feature rich, high-performing active RFID technologies.

Symbol and NCR Sign Reseller Agreement

  • It will help both companies retain their strong positions in the retail market;

  • The companies will now be able to provide a more complete solution for their RFID customers;

  • NCR's deep industry and deployment experience will be complemented with Symbol's high-performance enterprise mobility solutions;

  • Symbol will have the potential of expanding into new geographical markets such as the Asia-Pacific, as well as new vertical markets such as the financial sector; and,

  • End users will have access to more support for large-scale global RFID system implementations.

Additional Articles of Interest

radio frequency identification initiative Recognizing Real RFID Adoption Potential Supply & Demand Chain Executive

Wal-Mart use of RFIDWal-Mart Achieving Improved On-shelf Availability with RFID, Study Finds