Highlights from Baird's RFID Monthly for February
Baird has published the February edition of . The company is now publishing content on a rolling basis to the website , so you can check there for updates over the course of the month. Today's article offers highlights.
Feb 16, 2009
—This article was originally published by RFID Update.
February 16, 2009—Wealth and asset management firm Robert W. Baird & Co. has published the February edition of RFID Monthly. The company is now publishing content on a rolling basis to the website rfid-monthly.com, so you can check there for updates over the course of the month. The complete PDF version of the monthly report is here. Following are highlights:
- Earnings Reports Mixed for RFID. Key takeaways from the most recent set of company earnings reports are that cash preservation is the top priority and inventories are too high. With respect to cash preservation, we view this as a short-term negative as companies conserve capital and will delay new projects. However, we expect increased focus on inventory management will raise the profile of automated data capture technologies, including RFID.
- Sam's Club Delay. Sam's Club has pushed back its supplier compliance requirements versus its initial communication in January of 2008. We expect such a delay and reductions at Wal-Mart will weaken 1H09 inlay volumes, and will again lower expectations for full supply chain tracking, which we believe remains many years away. We believe Sam's remains committed to RFID. (See Sam's Club Letter Outlines Changes to RFID Requirements and Conflicting Messages Regarding Item-Level RFID in Retail.)
- Privacy Gaining Increased Notice; Ignore at Your Own Peril. As we have discussed in many past editions, the industry needs to address privacy concerns. We find this importance elevated recently given the public display of collecting unprotected passport card and electronic drivers license data in San Francisco. In addition, New York and New Hampshire have introduced RFID-specific privacy legislation, which could significantly curb any use of the technology. It'd sure be nice to see more of a concerted effort by the industry to educate the general public on security features and privacy. (See Latest Anti-RFID Video is Actually Worth Watching.)
- Pharma Still a Long Way Away, but European Tests Encouraging. Members of the European BRIDGE project provided an overview of its Pharma Traceability Pilot, which began in May 2006 and will be completed in June 2009. The project tracked item-level goods in a live supply chain and seems to have provided two key insights: mass serialization in Pharma makes good sense to implement, and implementation of such a system in a working supply chain is possible. We expect item-level RFID and 2D will continue to gain traction. (See EPCIS, RFID Effective in European Pharmaceutical Pilot.)
- Industry Shows Signs of Potential Shake-Out. We have long expected consolidation, and believe that the current weakness in the economy will drive increasing M&A activity as large players look for opportunity, while niche players seek refuge. We view Texas Instruments' RFID changes, largely driven by corporate macro events, as a signal that other industry players are evaluating their market position and level of investment. We expect these evaluations will lead to more partnerships and M&A. (See TI: RFID Customers Should Expect 'Business as Usual'.)
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