Symbol Anticipates a Breakout Year for RFID

Symbol Technologies foresees major RFID implementations in 2006, and has new initiatives and partnerships in the works. Yet a bump in RFID is not a sure thing.

If market indicators prove out, 2006 could be the breakout year for RFID—at least thats the goal for the folks at Symbol Technologies Inc., which manufacturers RFID-enabled tags, readers and antennas.

But there are no guarantees.

Symbol has a number of new initiatives in the works, including new form factors for readers (think fork lifts and other distribution center applications), handheld readers that incorporate EPCglobal Inc.s Generation 2 standard and multiplex reader capabilities through a recent partnership with Vue Technology.

At the same time, pilot programs underway will lead to new vertically-oriented supply chain tracking technology, while RFID mandates in the private and public sector could lead, potentially, to major implementations of RFID technology, according to Phil Lazo, general manager of RFID Infrastructure with Symbol.

"Were pretty excited about the possibilities in 2006," said Lazo, in Holtsville, New York. "From a market perspective, there are continuing [RFID] roll outs."

/zimages/1/28571.gifRFID fears create their own market. Click here to read more.

Lazo points to several pilot programs in the works at Symbol that are leading to new technology and potential implementations. For example, the company is participating in a worldwide interoperability test for baggage tracking in the airline industry that tracks baggage across airports around the world. Another program tracks parcel and post globally.

"There is interesting technology emerging tracking parcel and post," said Lazo. "It is the same UHF EPC technology, we just work with partners to create a specific solution around that [vertical market], tracking a number of items in the postal [system], providing customers with greater visibility of their product as it moves across the supply chain."

At the same time, mandates from the likes of the Department of Defense and Wal-Mart Stores Inc. that require certain suppliers to RFID-enable goods in 2006 ensure adoption at some level.

However, such measures do not ensure wide-scale RFID adoptability in the coming year, according to Lazo.

"We hope pilots will turn into full blown production in 06," said Lazo. "Other customers are coming online … some customers in retail will significantly expand out the number of stores implementing this technology. Is it a hockey-stick event in 2006? No, but it will be incremental and significant to sustain us in 2006."

Despite challenges, IT research firm Gartner Inc. expects RFID adoption to continue to gather momentum in the coming years.

In a report released earlier this month, Gartner predicted RFID spending will accelerate in 2006 and 2007 as "true benefits" are documented.

Worldwide RFID spending is expected to total $504 million this year, up 39 percent from 2004. By the end of 2006, new license revenue is expected to total $751 million. By 2010, Gartner predicts worldwide RFID spending will surpass $3 billion.

"Businesses are beginning to discover business value in places where they cannot use bar coding, which will be the force that moves RFID forward," said Gartner analyst Jeff Woods, in the study.

"As the innovators trials become public, broader deployments across emerging sectors, not just consumer goods and retail, will become evident in 2006 and 2007."

Next Page: The high price of tagging items.