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iPico Gets Funds, Shuns EPC

After raising $15 million, the South African RFID chip and reader designer says that for now, it will focus on pilots using its own technology.
By Jonathan Collins
Apr 05, 2004Earlier this year, South African RFID chip and reader design firm iPico Holdings raised $1.5 million in an investment from Mondi Europe, a major pan-European paper and packaging company based in Vienna, Austria. The company says it will use that investment to roll out pilots of its own RFID-enabled packaging, smart labels and tags with various types of packaging materials, including individual items, cases, pallets and containers.
Luther Erasmus

The company, which is based in Pretoria, specializes in RFID chip and reader design and licensing to semiconductor and OEM manufacturers. Its tags use the company’s own iPX over-the-air protocol to communicate with iPico’s own fixed, mobile and handheld readers across different frequency bands in UHF, microwave and low frequency—include some dual-frequency designs. Four of its six designs have entered production with Swiss semiconductor company EM Microelectronics. The company has also developed its own software integration middleware, which it sells through its system integrator and specialist partners, for RFID deployments using its equipment designs.

It is unlikely that much of the new capita raised by the company will go toward developing EPC products, as iPico executives say that they are holding off any development of an Electronic Product Code (EPC) tag, as they are is convinced that ongoing work at EPCglobal, the organization in charge of commercializing EPC, will fail to create a usable technology—at least in the near term.

“We have done the math, produced many documents, and we’ve discussed our concerns with many people in the industry. So far no one has proved us wrong,” says Luther Erasmus CEO of iPico. “We are not going to risk our resources on something that might not work.”

While the company says it expects that in the long run, the largest market for its designs will be in supply chain management (SCM) and EPC technology, it doesn’t believe that SCM will take off before other markets such as transportation and logistics management or the tracking of documents, parcels and baggage.

Part of the reason for that, iPico believes, is that work underway at EPCglobal has yet to address fundamental technical limitations of UHF communications as well as other essential issues that must be resolved before any large-scale EPC deployments can come close to delivering the target 100% read rate set by the DOD and others that plan on using EPC technology.

“There is a tendency [within the EPCglobal development community] to ignore the impact of water and metal on UHF,” says Erasmus, alluding to the fact that UHF radio waves are absorbed by water and reflected by metal—both of which can interfere with an RFID reader’s ability to correctly read the UHF signal emitted by an EPC tag. “These are laws of physics that cannot be changed. There can be improvements and innovation but no change.”

Other issues that will hold back EPC network deployment, according to Erasmus, are security, the inability of the air interface to deal with thousands of tags in close proximity, and the complexity of different radio spectrum restrictions in various regions around the world. Although Erasmus believes these issues may eventually be addressed in Class 1 Gen 2 EPC standard currently being developed, he is taking a wait-and-see approach until the release of the new standard, which EPCglobal members are expected to ratify this fall.

In the meantime, the company maintains, there is clear potential for UHF tags in many vertical markets. Chip designs by iPico are already being used by U.K. retailer Marks & Spencer’s ongoing pilot that tags items of clothing in some of its U.K. stores. The company also believes there is immediate cost justification for RFID deployment in industry verticals such as transportation and cargo tracking. And it is there that iPico will concentrate its efforts,

“The electronic license disk for vehicles is a potentially huge worldwide market,” says Erasmus, referring to the RFID-enabled device that replaces the road tax or registration stickers that many countries require drivers to put on their windshields.

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