Summary of Baird RFID Monthly for October
Baird has released its October report. The nineteen-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.
Oct 24, 2005
—This article was originally published by RFID Update.
October 24, 2005—Wealth and asset management firm Robert W. Baird & Co., widely referred to as simply "Baird", has released its October RFID Monthly report. The nineteen-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. Another section of interest is the matrix of 60+ primary RFID providers on page 12 (worth printing out as a reference). The Key Developments:
- Baird/AIM Global Conference. Baird and AIM Global hosted their second joint RFID industry conference in Chicago at the end of September. The event profiled a number of key industry topics, including intellectual property, industry investment, scalability and implementation. We saw strong attendance from a number of different segments within the industry. The key feedback from the conference was that industry participants tend to be overly focused on their specific segment of the industry and that this type of event provides a good forum to exchange ideas on key topics in the industry.
- End Users Eagerly Awaiting Gen 2 Technology. Pacific Cycle represented the end users community at the conference, and their comments clearly echoed other end user comments we have heard with respect to Gen 2. Pacific Cycle is looking forward to testing the new technology, but does not expect significant quantities of product to be available until 1H06. The company also indicated that it will need to see tag prices drop significantly in order to gain any reasonable ROI. Pacific Cycle currently generates roughly $0.08-$0.10 of benefit for each RFID tagged item.
- Intellectual Property Remains a Key Industry Issue. At the conference, Tom Wettach, a top intellectual property attorney, noted that roughly 1,500 RFID patents have been issued since 1997. This suggests that the agreements reached to date with Intermec may only have scratched the surface. Intermec has 151 patents, which represents just 10% of the total patents, implying there is still a lot of IP to consider by the consortium and other entities.
- Continued Investment in the Industry. The conference investment panel sees continued opportunity for investment in the RFID space. The panel included a venture capitalist, private company executive and corporate development perspective, which were fairly consistent. The panelists expected to see another round of funding is likely to come from both strategic and financial investors. Approximately 75 RFID companies are currently receiving funding and another 25 companies are seeking funding. The panel also indicated that the amount of corporate investment and investment by wealthy individuals has increased significantly. Following the funding, the panel expects a period of consolidation and IPO activity over the next 12-24 months.
- Study Concludes That RFID Improves Stockouts. An independent study from the University of Arkansas determined that Wal-Mart stores equipped with RFID reduced out-of-stocks by 16%, replenished out-of-stock items three times faster than the non-RFID-stores, and reduced manual orders by 10% resulting in less excess inventory. The University study lasted 29 weeks and compared 12 pilot stores equipped with RFID to 12 control stores not equipped with RFID.
- Wal-Mart Provides Update on RFID Implementation Plans. Wal-Mart indicated it is in the final stages of testing the Gen 2 standard and will begin accepting Gen 2 tagged products in January 2006; Wal-Mart expects to stop receiving Gen 1 tags in mid-2006. With reduced pricing, Wal-Mart has indicated that suppliers should begin tagging incremental SKUs in 2006. In total, the company expects to have 500 stores and five distribution centers using RFID the end of October, with 1,000 stores involved by the end of 2006. In addition, Wal-Mart indicated that an incremental 300 suppliers will fall under the mandate in January 2007.
Download the Baird RFID Monthly for October (pdf)
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
JOIN THE CONVERSATION ON TWITTER