Big RFID Deals and Their Meaning

Now, I'm not privy to the books of RFID companies, of course, nor do I sit on the boards of large technology companies that might want to acquire a startup if the price were right. I base my views entirely on what I see happening in the market.

Some companies, such as TrueDemand, have moved out of RFID to focus on other areas successfully, while some, such as Retail Solutions (formerly T3Ci), have gone into new markets in addition to RFID. And some RFID startups are doing very well, indeed—just consider Impinj. It's a young firm that recently sold off its volatile memory business to focus on RFID, and it purchased Intel's UHF reader chip business because it wanted to expand its position in the RFID market.

"We see things starting to heat up," Bill Colleran, Impinj's CEO and president, told me. "Last quarter, saw a lot of activity, driven by closed-loop applications and item-level trending. We see things picking up significantly, and are optimistic about the way the RFID market is trending."

I'm also not sure there are a lot of good strategic pairings out there. Big hardware companies can always buy up smaller companies that have either some IP or technology that's valuable, and/or a solid customer base. And big integrators can acquire smaller integrators to expand their RFID capabilities. But all of the big software companies already have RFID software products, so they might not have an interest in startups. As such, those firms will need to change strategies—or they will go out of business.

I do think we will continue to see sporadic deals like Checkpoint's acquisition of OAT and Impinj's purchase of Intel's RFID chip business. These will be smart and strategic and occasionally opportunistic (picking up a cheap asset to add to the bottom line). But I don't expect a large wave of deals in the coming months. This is good for the RFID industry, because it makes key technology providers stronger.

I know some pundits will claim Intel getting out of the RFID reader chip business and OAT putting itself up for sale are signs the UHF market is struggling, but it's also worth noting that Checkpoint and Impinj are increasing their investment in that very same market. And even Intel showed how optimistic it is about the market by taking a stake in Impinj, rather than cash, for its reader chip business. Just depends on whether you prefer to see the glass as half empty or half full.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.