HP’s Lab in Brazil

The company is doing some interesting work that could deliver a lot of benefits down the road.
Published: October 25, 2007

I’ve been to RFID labs all over the world. Most are very similar, with portals and conveyors and shrink-wrap machines containing RFID antennas. Hewlett-Packard‘s lab in Brazil, certified by EPCglobal, is similar to these (see HP Takes the Lead). It’s small, but has all the equipment you would expect, including an anechoic chamber that blocks out all external RF noise.

What impressed me, however, is that HP’s lab team is not simply developing RFID “toys” that might be useful. The company is also examining the business case for potential applications to determine whether the technology should be used in those applications.

For instance, one application the team has been working on involves tagging all items going into a single printer package—CD-ROM, manual, power cable, printer cable and so on. The tagged items are inserted into a box and read as the box goes through a portal, then read again for quality control.

The system works, but HP is not yet ready to deploy it. The team estimates that the tag price would have to fall to 3 cents apiece before it would make sense to tag all the individual items going into a printer box—only at 3 cents would the labor savings exceed the tag cost, they explain.

I often hear people say the tag cost is too expensive for them to use RFID, and I ask, “What price does it have to be before it makes economic sense for you?” Most people don’t have a clue; they are simply guessing that the cost is too high today to be offset by the benefits.

The guys in the HP lab not only proved the technology worked, but also analyzed the potential labor savings and determined the break-even point. It could be many years before the tags drop far enough, or they might never get that cheap, but I don’t think that means this is wasted work. Rather, it means HP is taking a smart approach to finding out whether the technology will work for particular applications, and determining whether there is a financial benefit if it will.

Some projects work out, such as the smart shelf (see HP Unveils Prototype Smart Display Case), and some don’t. But as Didier Chenneveau, VP and general manager of HP’s Americas operations, said during a panel I hosted at last week’s RFID Symposium in Sao Paulo, Brazil, “Our logo says ‘Hewlett-Packard Invent.’ It doesn’t say ‘Hewlett-Packard Sit Around.'”