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Summary of Baird RFID Monthly for April

Baird has released its April report. The 29-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.
Apr 24, 2008This article was originally published by RFID Update.

April 24, 2008—Wealth and asset management firm Robert W. Baird & Co. has released its RFID Monthly for April. 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 29-page document is available free here.

The standard matrix of primary RFID providers is on page 23, and following are the Key Developments:
  • Larger Tag Order Announced. We discussed in the February edition of RFID Monthly encouraging market commentary regarding tag orders that would exceed 10M units. The first of such orders was announced by Alien and George Schmitt & Co (GSC). GSC will supply RFID tags, incorporating Alien's Squiggle tag, for baggage tagging operations at Hong Kong International airport. According to the airport website, Hong Kong served about 48M passengers in 2007 and will process just over 15M bags for departing passengers per year. We believe expansion will include arriving passengers and passenger transfers, which total an incremental 25M units. We estimate a payback for Hong Kong of 1.2 years.
     
  • Industry Observations. We see two important indicators of traction in the broader RFID landscape. The first is that several vendors -- including hardware, software, and services -- are investing in people. We see additional hires and incremental talent entering into the industry. Second, during RFID Journal LIVE!, we generally heard from vendors a positive tone with respect to lead generation, with quantity exceeding expectations; quality was regarded as good. We view the increased headcounts suggesting project rollouts, and the greater number of leads as an indicator of increased pilot activity. (See RFID Journal LIVE a Signpost of RFID Market Maturity for RFID Update's report on the show.)
     
  • Large End-Users Increase RFID Development. We continue to hear discussion of large end-user RFID engagements, and we are particularly encouraged to hear the number of discussions increase. Key applications include IT asset management, returnables, file tracking, and yard management. Many of these projects are advanced, and in some cases, we are again hearing about passive tag orders exceeding 10M units. As discussed in the past, most of these players prefer not to be named as they view the investment as "strategic" in nature.
     
  • Retail Update. We don't hear much new with respect to retail/consumer products (CPG). It seems like volumes are flat to up slightly. Many CPG companies report challenges in finding sufficient value to move forward in a meaningful way. Despite this, we are encouraged to hear many consumer product companies continue to investigate the technology aggressively.
     
  • Increased Government Comment Requests. The FDA and European Commission are seeking comments regarding standards development and technology capabilities with respect to drug counterfeiting and e-pedigree in order to shape pending regulatory requirements and legislation. Also, recall that the European Union is seeking comments on the implications of privacy and security as they relate to RFID. (See FDA, EC Considering RFID for Drug Pedigrees for more on this.)


Download the full Baird RFID Monthly (pdf)
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