Summary of Baird RFID Monthly for October
Baird has released its October report. The 16-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 23, 2006
—This article was originally published by RFID Update.
October 23, 2006—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 16-page document is available free here.
The standard matrix of primary RFID providers is on page 13, and following are the Key Developments:
- Market Largely Focused on Developing Capabilities. We continue to see end-user and vendor focus on building RFID capabilities in terms of equipment features and functionality, and implementation and business process changes. End users remain interested in RFID, but primarily on learning and testing rather than deploying, which is resulting in a slower market than many vendors had hoped. We see end-user investments in the next 6-12 months focused on continued learning, while vendor investments are being made on equipment improvements and new capabilities.
- Standards in China Likely to Take on Increased Urgency. We understand that gaining China's acceptance of the Gen2 standard is taking on increased urgency given that the Chinese Congress, which convenes only once every five years, meets next year. Given this, China's development of its technology plans is in discussion today, and EPCglobal and other industry groups need to increase their emphasis on contacting Chinese officials above the Ministry level. The alternative to not reaching these officials could be a proprietary Chinese standard. We believe this would slow down the potential benefits of RFID adoption worldwide given that 70% of US consumer goods originate in Asia.
- California Rejects RFID Restriction, But Privacy Remains a Key Issue. California Governor Schwarzenegger vetoed Senate Bill 768, also known as the Identity Information Protection Act of 2006, which would have restricted certain uses of RFID in public documents. In his response to the Senate, the Governor expressed concerns about the timing of the act, citing it as premature and possibly contradictory to pending federal mandates under the REAL ID Act, and as potentially prohibitive against the adopting of new technology that could "streamline operations." Despite the veto, we expect increased privacy legislation will continue to be proposed given a wide variety of concerns expressed by privacy groups and some state and federal legislators. (See California RFID Restrictions Get Governor's Veto.)
- Baird's RFID Stock Index Up, But Underperformed the Averages. On October 16, Baird's RFID Index was up 3.7% vs. September 15, slightly underperforming the NASDAQ (+5.7%) and matching the S&P500 (+3.7%). Of companies under Baird Supply Chain Technology coverage, Symbol (+19.5%), Brady (+6.5%), and NCR (+11.1%) outperformed all indices. Zebra (+3.7%), which announced the retirement of founder/CEO Ed Kaplan, and Intermec (-16.4%), which negatively pre-announced 3Q06 earnings, underperformed all indices. Big movers in the index included WJ Communications (+17.7%), Intel (+10.8%), Accenture (+10.1%), Cisco (+8.2%) and Sirit (-10%).
Download the full Baird RFID Monthly (pdf)