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SAMSys Looks To Standards, VARs

The Toronto reader maker is betting that its move toward open standards and partnerships with value-added resellers will pay off.
Tags: Standards
Sep 02, 2002September 2, 2002 -- It's been a very tough year for SAMSys Technologies, (SMY:TSX-VEN). Last week, the Toronto-based company reported dismal financial results for the first nine months of the year. But the company expects its new strategy, which relies on open standards and relationships with value-added resellers, will start to pay off soon.

For the nine months ended June 30, SAMSys, which offers an extensive line of RFID readers, posted revenue of $1.3 million, compared to revenue of $2.3 million for the same period in fiscal 2001. The company recorded a net loss of $4.1 million, compared to a net loss of $2.1 million a year ago.

The net loss for the first nine months of this year includes a charge of $1.5 million for the amortization of production development costs and $1.4 million in research and development expenses. The company has undertaken an aggressive product development initiative to build out a complete line of RFID readers, including several multi-frequency readers.

SAMSys chief operating officer Tres Wiley told RFID Journal that the decline in revenue was due to a general downturn in IT spending, confusion in the market created by the Auto-ID Center's high-profile claims of producing a 5-cent tag, and the company's shift from building customized readers to developing a standard product line.

"We want to have a fully qualified product line ready for sale," Wiley said. "That is taking resources, but we think it will lead to good results."

SAMSys will show off the world's first GTag compatible reader at the Frontline Solutions show in Chicago later this month. GTag stands for Global Tag and is a standard backed by the UCC and the EAN, the two main bar code administrative bodies.

Wiley said SAMSys decided to join the Auto-ID Center because of the general movement in the market towards standards, including ISO 18000-6 and the Auto-ID Center's proposed electronic product code.

"We see a lot of forces starting to coalesce around these standards," Wiley said. "We feel these efforts should be supported, and this is a financial contribution to [the Auto-ID Center] first and foremost. And being a part of the center lets us learn faster and influence [the system under development] in ways that will be beneficial."

SAMSys has also been working aggressively to establish relationships with leading value-added resellers (VARs). Not only will the VARs have the ability to identify where RFID is useful and install the system, but they also have relationships with Fortune 1000 companies.

"We think that working through the VARs and traditional data capture companies is the right way to go," Wiley said. "That is where we are putting a lot of our sales and marketing efforts right now."
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