|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
Big RFID Deals and Their Meaning
Do Impinj's purchase of Intel's RFID reader chip business, and Checkpoint's acquisition of OATSystems, indicate we're about to see a wave of consolidation within the RFID industry?
Jul 14, 2008—Two of the more significant deals in the radio frequency identification industry occurred within a couple of weeks of one another, raising the question: What's up?
First, in late June, Checkpoint Systems announced it was acquiring RFID middleware and applications provider OATSystems (see Checkpoint Systems Acquires RFID Software Company OATSystems and Checkpoint Systems Deems OAT Acquisition Strategic). Then, just 16 days later, Impinj, a leading provider of RFID chips, tags and interrogators, announced it had acquired the RFID reader chip business of heavyweight Intel (see Impinj Acquires Intel's UHF RFID Reader Chip Operation).
There is some truth to this theory. The market for passive ultrahigh-frequency (UHF) systems based on the Electronic Product Code (EPC) standard didn't take off as quickly as expected after Wal-Mart and others announced they were adopting the technology. The market for high-frequency (HF) ticketing, payment, access control and other applications is growing briskly, and the market for active RFID systems has grown faster than anyone predicted a few years ago.
So if there is consolidation, it's likely to be primarily in the passive UHF arena. It's probably fair to say Intel expected sales of its UHF reader chip to pick up faster than they have, and so the semiconductor giant decided to focus on its core businesses. And OAT probably realized revenues would not grow fast enough to enable it to build out an infrastructure to support its big customers globally, so it opted to be purchased by a larger technology company with that infrastructure in place.
But I don't think these two deals are the start of a major wave of acquisitions, and here's why: There has to be a significant number of companies desperate for cash, and there have to be enough other companies eager to get into the RFID market or expand their current position—and there have to be good strategic marriages. Those conditions simply don't exist at present. There are certainly some companies in need of cash, and there are clearly firms willing to expand their market presence, but I don't think there are a large enough number in either category.
Login and post your comment!
Not a member?
Signup for an account now to access all of the features of RFIDJournal.com!
SEND IT YOUR WAY
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
|RFID Journal LIVE!||RFID in Health Care||LIVE! LatAm||LIVE! Brasil||LIVE! Europe||RFID Connect||Virtual Events||RFID Journal Awards||Webinars||Presentations|