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SmartCode Announces 7.5-cent Inlays

RFID manufacturer SmartCode today announced the availability of Gen2 inlays at a price of 7.5 cents per unit for quantities over one million. For quantities over ten million, the price goes down to 7.2 cents per inlay.
Oct 06, 2005This article was originally published by RFID Update.

October 6, 2005—New York-based RFID manufacturer SmartCode today announced the availability of Gen2 inlays at a price of 7.5 cents per unit for quantities over one million. For quantities over ten million, the price goes down to 7.2 cents per inlay. The new pricing is being launched under what the company is calling its EPC Gen 2 Quickstart Program, which, according to the release, "offers the lowest cost EPC Gen 2 inlays in the industry." The new pricing is available until January 1st, but orders can specify delivery dates of anytime throughout 2006.

The Gen2 inlay is called SL-EPC-2630. SmartCode describes it as a "general, multi-purpose inlay with superior RF performance" in a small 4-inch by half-inch form factor. The size is the same as the older Gen1 inlays, facilitating Gen1-to-Gen2 inlay migration. The company says it can produce 10 billion SL-EPC-2630 inlays annually. During the EPCglobal conference a few weeks ago, SmartCode announced an enormous order for 100 million EPC Gen1 and Gen2 tags from Korean RFID distributor MSWAYCO.

SmartCode is also boldly saying that it will match any price for competing Gen2 inlays. "As volume orders for EPC Gen 2 are starting to pick up, it's important for companies to understand that SmartCode Corp. can and will beat any price in the industry," said president Avi Ofer.

The claim brings into sharp relief the new dynamic of the RFID tag and inlay market segment: grab market share. As the pricing war heats up (and after five tag/inlay-related pricing announcements in the past three weeks, it does seem justified to call it that), companies will be vying to get as much volume as possible to pay for the expensive up-front cost of such low prices. Many industry observers argue that only at massive volumes can those prices yield a profit, which suggests that the inlay and tag manufacturers will lose money in the interim. Indeed, the strategy is risky, and some manufacturers probably won't survive while others will be acquired. One thing is certain: the end-user will benefit.

For more on how the pricing announcements are being received, see Tuesday's story Reduced RFID Prices Stimulating Demand. Also, for your reference, below is the chronology of relevant pricing announcements:

Read the SmartCode press release
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