Jan 22, 2009This article was originally published by RFID Update.
January 22, 2009—Chinese RFID products manufacturer Invengo Technology is signaling its entry into the North American market today by announcing it will sell Gen2-standard passive UHF inlays for 5.8¢, which the company says is the lowest price available on the market. The new price is available immediately for orders of more than five million units. Invengo previously sold the same inlays for 7.7¢.
Inlays are not complete RFID tags. Inlays consist of a chip connected to an antenna on some form of substrate. Tag prices depend heavily on the cost of the inlays, but also on the materials used to create the completed tag, which may take many forms ranging from adhesive smart labels used in printer/encoders to durable metal or plastic enclosures used in extreme environments.
Invengo's inlays are based on the NXP G2XL chip that is widely used by other inlay manufacturers. Invengo soon plans to release a comparably-priced inlay based on the Monza 3 chip from Impinj.
Invengo's dramatic price reduction -- approximately 25 percent less than its previous price, which was in line with industry norms -- could lead other inlay providers to reduce their own prices. That happened in late 2005, when Avery Dennison introduced 7.9¢ inlays, which at the time was significantly below its competitors' prices (see Avery Dennison Announces 7.9-cent Gen2 Inlay and Avery's 7.9-cent Inlay Excites Industry). Inlay prices haven't changed much since then.
"I'm expecting some response from our competitors," Invengo vice president of sales and marketing Phil Calderbank told RFID Update. "I don't know if they'll come down on their prices as far as this, or if they're able to."
Calderbank is a longtime RFID industry executive who recently joined Invengo and is playing a leading role in helping the company enter the US market. He was most recently with Impinj and was with Avery Dennison when that company broke the 8-cent inlay price barrier.
"It caused a real stir back then," Calderbank said. "At this stage in the industry's development, a company that is not well known needs a low price to get consideration."
Invengo is a publicly-traded, 16-year-old company headquartered in Shenzhen, China and has primarily operated in China and Singapore. It designs and manufacturers its own UHF and HF inlays, tags and readers. The firm is best known as the RFID technology provider for China Railway's automatic train identification system, which includes 17,000 RFID readers, 565,000 passive tags and an information system integrated across 995 facilities in the China Railway network.
Invengo is now establishing US operations based in Herndon, Virginia. It plans to sell its readers and tags in the US in addition to inlays. The company does not plan to sell to end users and is developing an indirect sales channel of integrators, resellers and tag converters.
"Over the coming weeks we will be announcing additional low prices on our full range of RFID inlays, labels and readers," Invengo CEO Heather Wang said in the company's announcement. "We are excited to be entering the market at this time. "Despite the weak global economy, we see strong growth potential for RFID applications, and we intend to help our partners to achieve this growth by offering the highest performance products at lowest possible prices."
