Symbol Considers RFID Options

Company sees potential for tags in untapped markets.

Despite initiatives by the likes of Wal-Mart and Target, and a good bit of hype, tracking goods with RFID tags isnt going to become commonplace until the technology can prove itself useful in new applications, according to Sal Iannuzzi, president and CEO of Symbol Technologies.

Iannuzzi maintains that radio-frequency identification has years to go before it hits its stride, and he hesitates to guess when that will be, despite the companys status as the market leader for RFID readers and a major supplier of RFID tags.

"In time, it will be a very significant market, but whether that happens in 07 or 08, I dont know that," said Iannuzzi in a Feb. 6 interview. "Its such an embryonic market that its not about revenue yet ... in some ways, you can view it as a startup."

To that end, Symbol, which also is the market leader in bar-code scanners, is developing RFID tags for untapped markets, Iannuzzi said. Symbol gained significant RFID intellectual property with the acquisition of Matrics, a Rockville, Md., RFID technology company, in 2004. (Symbol also acquired competitor Intermec Technologies patent infringement lawsuit against Matrics; after much wrangling, Symbol and Intermec settled their differences in September 2005.)

"In Rockville, theyve just developed a ... hardened tag—a tag encased in a very heavy plastic shell, which could be used to screw into the top of a utility pole and where a utility worker could read the tag on the top of that pole," Iannuzzi said. "There are a lot of poles in the world, and that would save a lot of climbing if a guy could read that [tag] sitting in his truck."

Symbol, in Holtsville, N.Y., is working with a major utility company on a beta trial for the tag, which is specially tuned for metal mounting. It can be read up to 50 feet away with a device such as the companys MC-9000-G RFID handheld reader. The tag will be available by the middle of 2006 and will have a list price of about $13, Symbol officials said.

"People have to understand the potential of the technology," Iannuzzi said. "The more people are educated, the more ideas are coming out. But thats what makes it so difficult."

Technology consultancy ABI Research estimates that total RFID revenue will exceed $3.2 billion by the end of 2006 and will be close to $9 billion by the end of 2009.

But, to Iannuzzis point, success will depend on finding popular applications beyond retail distribution centers, analysts say.

"Just because bar codes are used extensively in distribution centers does not mean RFID will be," said Jeff Woods, an analyst at Gartner, in Stamford, Conn., in a December 2005 report. "Businesses are beginning to discover business value in places where they cannot use bar coding, which will be the force that moves RFID forward."

Iannuzzi agreed. "Our RFID revenue is inconsequential to the overall [well-being] of the company right now," he said.

In addition to RFID devices, Symbol makes rugged handheld computers, WLAN (wireless LAN) hardware and bar-code scanners—for which the company is best-known.

"But it [RFID] is an important market," Iannuzzi said. "We cant be a leader in data capture without being a leader in RFID."