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Despite big initiatives by the likes of Wal-Mart, Target and the Department of Defense, and a good bit of hype, tracking goods with RFID tags isnt going to become commonplace anytime soon, said Sal Iannuzzi, president and CEO of Symbol Technologies.
In a Feb. 6 interview with eWEEK, Iannuzzi said 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.
“In time, it will be a very significant market, but whether that happens in 07 or 08, I dont know that,” said Iannuzzi. “Its such an embryonic market that its not about revenue yet … in some ways you can view it as a startup.”
RFID uses radio frequency waves to transfer data between a reader and a tag to identify, track or find a tagged item. (The tracking capability is what has spawned privacy concerns.) Symbol markets both readers and tags.
Technology consultancy Gartner estimates that new license revenues for RFID will total $751 million worldwide by the end of 2006. By 2010, Gartner forecasts worldwide RFID spending to surpass $3 billion. 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, research vice president at Gartner, 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 agrees.
“Our RFID revenue is inconsequential to the overall being of the company right now,” Iannuzzi said. Symbol also makes rugged handheld computers, bar-code scanners, and wireless LAN equipment.
“[RFID] is about research, development, education and developing new markets,” said Iannuzzi, who took the helm at Symbol after former CEO Bill Nuti resigned to become the CEO of NCR in August; Iannuzzis interim CEO stint became an official stint in January.
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 Intermecs patent infringement lawsuit against Matrics; after much wrangling, Symbol and Intermec settled their differences in Sept. 2005.)
“In Rockville theyve just developed a tag that is 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,” he said. “There are a lot of poles in the world, and that would save a lot of climbing if a guy could read that sitting in his truck. Thats the type of thing were [investigating.] We have to educate. People have to understand the potential of the technology. The more people are educated, the more ideas are coming out. But thats what makes it so difficult.”