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Summary of Baird RFID Monthly for October

Baird has released its October report. The 21-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 18, 2007This article was originally published by RFID Update.

October 18, 2007—Wealth and asset management firm Robert W. Baird & Co. has released its RFID Monthly for October. Baird has given RFID Update permission to reprint the Key Developments section (below), which offers the report highlights. For those wanting more detail, the complete 21-page document is available free here.

The standard matrix of primary RFID providers is on page 15, and following are the Key Developments:
  • Increased RFID Enthusiasm. Industry contacts suggest meaningful business opportunities are finally emerging in the RFID market. We are careful not to suggest that the much anticipated "hockey stick" is apparent, but we are optimistic based on the level of sales and ordering activity in the industry. We believe Gen2 related hardware revenue will double versus 2006 and will increase by 75%-100% in 2008. We believe the 2008 hardware market will increase to $125M-$150M.
  • Larger Players Becoming More Vocal. The EPC Connection show opening featured Microsoft, Intel, and Hewlett-Packard promoting RFID as they shared the stage. Microsoft was the show's signature sponsor, and COO Kevin Turner provided the opening keynote and articulated how RFID is now an important component of the BizTalk 2006 R2 product (see Microsoft's RFID Offering a "Watershed Moment"). We believe such an endorsement will fuel greater piloting of RFID. Microsoft and Intel have historically taken a less prominent role in promoting the technology.
  • Expanding Item Level Markets. We have become particularly interested in how the apparel and pharmaceutical markets appear to be developing. Apparel pilots are on the rise, and we have spoken to several vendors that seem particularly excited. In addition to the Marks and Spencer rollout, Metro, Dillard's, Levi's, and New Balance are piloting. We estimate over 22 billion garments and shoes are shipped worldwide each year. We also see increasing opportunity in pharma, where the distributors are moving forward with RFID. While we expect manufacturers will be slow to follow, we expect to see increased activity.
  • Embedding RFID Inlays into Boxes. Domino and HIDE-Pack introduced a solution to place RFID inlays directly on corrugate boxes, which we believe will provide a strong value proposition to high-volume supply chain participants desiring to place RFID on their products. The solution will eliminate up-front "print and apply" capital costs and reduce labor necessary to place RFID tags on a box. The solution has already been tested to run at line speeds of 6,000-18,000 units per hour, with no impact on "normal" throughput. Early testing has indicated that the HIDE-Pack system can reduce costs 35% versus hand-applying a label.
  • New Products Becoming Increasingly Application Specific. New products are coming online to address a wider variety of applications. NXP has added new tag silicon in addition to Alien and Impinj; we are seeing new tag designs with smaller form factors. New reader designs are allowing for a good, better, best product strategy, and integrated silicon is allowing lower-cost readers. We expect a second iteration of reader 1H08 will provide for an improved offering of mobile products and modules. We see demand strengthening for RFID reader modules and expect several new product introductions in the next 3-6 months.

Download the full Baird RFID Monthly (pdf)
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