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    Symbol Marches Forward with RFID

    Written by

    eWEEK EDITORS
    Published September 26, 2006
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      NEW YORK—On Sept. 19 Motorola announced its plans to acquire enterprise mobility company Symbol Technologies for $3.9 billion. While it was rumored that there was interest in Symbol from Motorola as well as its competitors, the announcement sent ripples through the RFID industry where Symbol has a strong presence in the reader and tag market.

      Senior Writer Renee Boucher Ferguson sat down with Anthony Bartolo, the vice president and general manager of Symbols RFID and Wireless Infrastructure Divisions, on Sept. 25 in New York to discuss where Symbol is at now with its RFID efforts, and where Symbol and Motorola might take the nascent technology together.

      The chief technology officer of Symbol, who was scheduled in Mr. Bartolos stead, was not available.

      Prior to the Motorola acquisition, where was RFID on Symbols roadmap prior, and where do you expect to go once the company is acquired?

      We are still going through an integration process that will take place through the end of the year, beginning of next year at the latest and then we will be one entity. I would anticipate that, depending on the development cycles of both the Motorola teams and Symbol teams, and the synergies we will get, you will start to see products that are a combination of the two within two or three quarters or so.

      What I do expect is the RFID portfolio will be primarily a Symbol portfolio. Symbol has a very strong reputation in RFID. Our portfolio has been continuing over the last two-and-a-half years since our acquisition of Matrix, and our products are continuing to be enhanced.

      What we found is we dont feel that our product portfolio is wanting actually. What we feel is our product portfolio [needs expansion in other areas]: Its availability in multi countries, in many, many countries, and with RFID standards.

      RFID standards, though they fit in with EPCglobal, the regulatory bodies of RFID within each individual countries in some cases hasnt even been established. Weve deployed RFID within those countries, but the governments have provided a waiver in some cases because they havent established a regulatory body.

      So foremost for us is to continue to enhance our geographic expansion of the existing product—so having the RD5000 [wireless RFID reader announced last month] available not only in the U.S. and certain parts of Europe, but to cover all of Europe, to cover all of Asia Pacific.

      But we have to do that on a country-by-country basis, which we do. We do that relatively methodically. But it takes time. With a wider resource base such as Motorolas, I can see that activity happening much faster, which would be a definite net benefit for our customers, particularly global customers.

      In talking to analysts, partners and different experts in the industry, some consensus was that Motorola might drop Symbols RFID line all together. Any chance of that happening?

      I dont see that happening. Motorola has categorically stated that they plan on keeping all the divisions within the company—[RFID] is what attracted them to Symbol in the first place. So I dont see that happening. Ive seen some reports, and I was surprised. I think this is one of the first acquisitions not done for cost cutting or synergies but for product portfolios that actually make sense.

      /zimages/4/28571.gifClick here to read more about Symbols future now that it has been acquired by Motorola.

      This is an excellent move for RFID. Certainly Motorola and their avenues to market complement ours so much. There are certain avenues to market which we had no real traction with—not as a result of not having the product portfolio, but more as a result of not having the reach or breadth of established relationships that would allow us to gain traction in any meaningful way.

      It seems like Motorola has worked on RFID development for a while—a couple stabs in the 1990s and some current development work—but it has not had a lot of success. Symbol too has an RFID division, but it has not been a real profitable division. What will it take to really bring RFID home?

      Its like any business in its early days. You spend time developing the right products that will stimulate volume, which really drives profitability. I dont know if you know any company thats profitable in RFID right now. Let me just say that some are more profitable than others.

      Were very happy with the trajectory of our RFID business and its incumbent upon me to enhance that trajectory and its behaving the way we see nascent technologies behave. So there is nothing discouraging that we see about RFID technology at all.

      Do we want it to go much faster to see adoption a complete hockey stick? Absolutely. Wed love to see that. What are precursors to that are natural development phases of customers and how they develop technologies.

      RFID used to be for free, where you effectively give customers equipment to try out and basically do technology testing—seeing if it works. Those days have moved on to the paid for pilot, where technology has been proven out. Its now a case of seeing what processes prove out. When you pay for a pilot something unique happens.

      Next Page: Read rates and tag prices.

      Read Rates and Tag


      Prices”>

      You start to ask fundamental questions, and its increased the sales cycle. The sales cycle tends to go from 18-24 months from pilot to full deployment. Thats what were seeing—many, many more pilot deployments than in the past.

      Can you quantify how many pilot deployments youve seen in the recent past?

      Sure. In Q1 we had 15 pilots—paid for pilots—and in Q2 we saw in excess of 40. Well see how Q3 plays out.

      Going forward [with Motorola] will your focus be on tags, readers, inlays or elsewhere?

      Our focus is on systems. So what weve noticed is our customers come to us for an RFID system—they want to make sure that whole end-to-end system works. We have our tag product portfolio, our reader product portfolio. But as youll see, we keep talking about the RD5000 but its actually a system. The tag is built to work in concert with the RD5000—its not exclusive—but it can help optimize [read rates].

      We feel that if youre going to deliver RFID technology, you need to be able to understand both aspects. Not until the day where tags may be very easy to produce and everybody can guarantee service level agreements that a tag is going to read X percent of the time with this particular level of probability. Its not until that level of [service] that youll see us consider where we scale on tags.

      So at this point of time, its a necessary entity. And at this point in time, our customers see it that way too. They want one throat to choke.

      Where are read rates now, and where are tag prices at now? Theres always that 5 cents a tag goal.

      Five cents a tag, thats a commodity consumable market. We tend to participate in markets that are not consumable tags, which tend to be dollars and not cents. We think active UHF RFID is a great space to be in, that has a lot of promise.

      /zimages/4/28571.gifClick here to read about Symbols history with RFID technology.

      I anticipate youll see a lot more products coming out from us in the very near future that will start to accelerate that particular market. And our tag product portfolio continues to increase at the same time. Our read rates are sometimes 95 percent, sometimes 100 percent, depending on the environment.

      In terms of vertical industries, where are you focusing and where do you intend to go?

      Aviation, especially these days, we see a 20 percent increase in bags being checked. Primarily with RFID I see a tale of two markets—the mandate driven market and the ROI [return on investment] driven market.

      The mandate driven market, everyone just looks at as the Wal-Mart driven market, but meanwhile whats really going on is in excess of 85 percent of our pilots are ROI pilots. These are pilots that customers are deploying because there is a definitive ROI. Its not a push; its a hey look this makes absolute sense for my business.

      It doesnt mean the mandate doesnt make sense, Im just saying that its not someone else driving their RFID strategy, its actually ROI thats driving strategy.

      Of that 85 percent, what industries are customers coming from?

      Retail, asset management, asset tracking, inventory tracking, pharmaceutical, e-pedigree, areas like those.

      Do you ever see going into the applications business, for example middleware that sits directly on a reader?

      One thing that grows a technology out from nascent to mainstream is everybodys RFID, their technology savvy-ness in that area. So bringing the ecosystem of partners up in the knowledge and awareness of that particular product, and part of that is making sure that applications are RFID aware and RFID capable—thats what we do.

      So getting into RFID applications is not necessarily something we would do. What we would do is work with a partner to make that easier. What we would tend do is work with a partner to develop an application and they own that application. And what we definitely do is make that easier. We developed a common set of application interfaces that makes it easier for our partners to develop on, that gets their product to market very, very quickly. And thats where our focus is.

      /zimages/4/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis on mobile and wireless computing.

      eWEEK EDITORS
      eWEEK EDITORS
      eWeek editors publish top thought leaders and leading experts in emerging technology across a wide variety of Enterprise B2B sectors. Our focus is providing actionable information for today’s technology decision makers.

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