EPC Insider

EPC Insider is the only analytical report on EPC technology written by those who helped to shape the industry. This 9,000-word report covers the key accelerators driving
EPC adoption and the issues that are acting as a drag. The authors don't hedge; they call it as they see it and make predictions for how EPC technology will evolve and what specifically to expect over the next six months, one year and beyond.

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CONTENTS

Executive Summary: As EPC Gains Momentum, Positioning Becomes Critical

Accelerators: Super-Adopters Wal-Mart and the Defense Department drive EPC adoption

Brakes: Interoperability and other issues will be a drag on EPC adoption this year

Trend Analysis: Small-scale rollouts begun this year will expand rapidly in 2005 and beyond

Guidance: 2004 Will Determine the Winners and Losers of 2005 and Beyond

Conclusion: Time to Face the Future: This year, end users and vendors need to position themselves for success

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Executive Summary

As EPC Gains Momentum,
Positioning Becomes Critical

Four major events that occurred in 2003 will have a major impact on the pace and breadth of the adoption of the Electronic Product Code (EPC) through the end of the decade: The Gillette Co.’s purchase of 500 million EPC tags, Wal-Mart’s decision to require all of its suppliers to use EPC tags by 2006, a similar announcement by the U.S. Department of Defense, and the Uniform Code Council and EAN International’s decision to take over the commercialization of EPC technology. While these events have been widely reported, their implications have been little understood.

Positive momentum in the EPC market will be tempered somewhat in 2004 by short-term hiccups related to failed pilots, interoperability issues and possible stumbles by EPCglobal, the joint venture set up by the Uniform Code Council and EAN International to commercialize EPC technology. These issues will receive a lot of coverage in the media, as journalists look for new angles on the RFID story. But these issues will not seriously slow adoption. More retailers will embrace EPC technology this year and in 2005. This section of the report forecasts tag consumption through 2010.

End users—manufacturers, retailers, and logistics providers—need to move aggressively to learn how to deploy and use RFID systems, to position themselves to take advantage of the technology. Suppliers need to find internal efficiencies to offset the cost of putting tags on cases and pallets for their large retail customers.

RFID vendors and service providers need to develop EPC-based offerings and position themselves in the market for when large-volume purchases materialize in 2005 and beyond. Investment will flow into companies purporting to be developing or selling EPC technology. New companies will be created to tackle the emerging market for EPC hardware and software, and existing companies will reinvent themselves as EPC technology providers. But the market opportunities in the short-term will be limited and most start-ups will fail. The real winners will not emerge until 2007 or later.

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About the Authors

Kevin Ashton, was cofounder and executive director of MIT’s Auto-ID Center. He led development of the Electronic Product Code and was instrumental in building global support for RFID. He joined MIT in 1999, on loan from Procter & Gamble, where he was associate director. Since the successful conclusion of the Auto-ID Center project in October 2003, Ashton has been writing a book about RFID. He speaks regularly to audiences around the world, and he provides expert commentary to media, including The New York Times, Time, The Economist, the BBC and NPR. His regular column “Ashton’s View” appears in the new print edition of RFID Journal.

Mark Roberti is the founder and editor of RFID Journal, the leading source of intelligent news and analysis about RFID and its many business applications. RFID Journal is read by more than 80,000 people around the world each month. Roberti has reported on business and technology since 1985. His work has appeared in Business 2.0, Fortune, The Asian Wall Street Journal, International Herald Tribune, The New York Times and many other publications. Prior to launching RFID Journal in 2002, he was senior writer at the Industry Standard. He has also served as managing editor of InformationWeek and is the author of a bestselling book about Hong Kong’s return to Chinese rule.

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