This article was originally published by RFID Update.
April 18, 2006—In addition to the Alien IPO, the industry has been buzzing for the last few weeks about two large RFID reader buys, the first from Wal-Mart, the second from grocery chain Albertsons. Wal-Mart is expected to purchase 15,000 readers, split between Impinj and Alien. Albertsons is reportedly going to buy 5,000 readers, all from Symbol. None of the companies involved would comment when contacted by RFID Update.
According to numerous sources, Wal-Mart’s vendor choice of Impinj and Alien was based largely on price. While the exact per-reader price is not known, it is understood to be very aggressive and lower than any publicly advertised Gen2 reader list price; that is, less than $1,000. Many of the people RFID Update spoke with believe such pricing would be difficult for reader vendors to extract profit from. But they also point to other reasons that the vendors would want Wal-Mart’s business. As an example, a big reader buy from Wal-Mart would be a very timely feather in Alien’s cap given the company’s planned initial public offering.
Some are surprised at the selection of Impinj readers, since the company is known primarily for the silicon chips currently found in all Gen2 tags on the market. Recall that since Impinj released its Monza chip a year ago (read our article), it has enjoyed a de facto monopoly on Gen2 silicon. (Texas Instruments and Philips Semiconductors, among others, are expected to begin production of Gen2 silicon soon.) But some speculate that it is precisely the ubiquity of Impinj silicon that attracted Wal-Mart to Impinj readers, the rationale being that brand homogeneity — Impinj readers coupled with Impinj silicon — could yield optimal performance.
The current reader base installed at Wal-Mart is from Matrics, the RFID hardware manufacturer Symbol purchased for $230 million in September of 2004 as an aggressive foray into the RFID industry.
The Wal-Mart deal has been overshadowing Albertsons because of its relative size, but note that Albertsons itself is quite significant. Indeed, without Wal-Mart’s 15,000-reader purchase stealing the limelight, Albertsons purchase of 5,000 readers would otherwise be the biggest to date, beating out the 4,000 readers commissioned from Tyco’s ADT by UK retailer Tesco in early 2005.