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Summary of Baird RFID Monthly for September

Baird has released its September report. The twenty-page document is a worthwhile read for anyone requiring an overview of the industry's last 30 days. For those without time to do so, we have reprinted here the report's summary.
Sep 21, 2005This article was originally published by RFID Update.

September 21, 2005—Wealth and asset management firm Robert W. Baird & Co., widely referred to as simply "Baird", has released its September RFID Monthly report. The twenty-page document is a worthwhile read for anyone requiring an overview of the industry's last 30 days. For those without time to do so, we have reprinted the Key Developments section below, which serves as the report summary. Two other sections of interest are the grid of 62 primary RFID providers on page 14 (worth printing out as a reference) and the listing of all awarded RFID blanket purchase agreements (BPAs) on page 11. The Key Developments:
  • Interest in RFID continues to unfold. Several contacts at the EPC Global U.S. Conference indicated that end-user senior managements are taking a greater interest in RFID. Further, pricing also appears to be moving in a positive direction. Alien announced unit tag pricing of $0.129 for orders exceeding one million units for its Class 1 (Generation 1) tags. We expect Gen 2 pricing will drop rapidly as existing players seek to balance existing Generation 1 inventory and production with Gen 2 volume.
  • Gen 2 certifications granted. Impinj had its chip certified by EPC Global as Gen 2 compliant, along with seven reader providers, which include Alien, AWID, Intermec, Impinj, MaxID, Symbol, and ThingMagic. We expect more certifications by year-end. However, in our view, it will be more important to have products certified to be interoperable. End users have indicated interoperability is a key factor in pursuing increased RFID deployment. We believe EPC interoperability testing will likely not begin until 1H06.
  • Standardization continues to progress. EPCglobal indicated at its U.S. Conference last week that the Gen 2 standard was "roughly 50% through" the ISO process. Further, EPCglobal expects to have the remaining standards in place by the end of the calendar year. These include Filter & Collection - Application Level Events (ALE) specification, ONS application Interface, EPC IS framework & query interface, reader protocol, reader management guideline and tag data translation.
  • U.S. Department of Defense DFAR clause granted. The U.S. Department of Defense had RFID requirements approved for insertion into the Defense Federal Acquisition Regulation (DFAR). The DoD must seek a DFAR change in order to place RFID as a requirement into all DoD supplier contracts. The new DFAR clause was published into the Federal Register and will go into effect on November 13. This change will now require DoD suppliers to tag shipments with RFID, according to a specific implementation timetable. The DFAR clause approval is roughly one year later than anticipated.
  • RFID momentum continues, but pace of adoption remains modest. Interest in Gen 2 by industry participants and end users is high, and we expect significant new product introductions by year-end. However, the ability for end users to receive and test products in quantity will likely not occur until 1Q06 as readiness and interoperability are as yet unclear. As indicated above, EPCglobal has certified only Impinj for silicon and seven reader vendors. We expect more certifications by year-end, but believe EPC interoperability testing will likely not begin until 1H06. According to our end-user contacts, interoperability is a key requirement for end-user adoption. Therefore, we expect only modest Gen 2 piloting until mid-2006.


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