Why are some RFID companies highly profitable and others collapsing?
There is a great need for profit optimization and careful product positioning
and repositioning in the frenetic but unforgiving RFID market that is
increasing ten times to become a $26 billion business in 2016. RFID is
entering most sectors of corporate, public and private life so understanding
how to create enduring profit from such a choice of designs and applications,
software, hardware and services, calls for great care and modern management
tools.
Last year, the profits of 1000 RFID activities varied from about ten million
dollars to a loss of $53 million. Too much of this was unplanned and
unintentional. Some of these companies are growing rapidly and profitably but
others have recently gone out of business. Yet, in this fast growing,
fragmenting market, the performance of the players obeys rules of the
marketplace and success and failure can largely be predicted and controlled.
IDTechEx has studied its 2000 case studies of RFID in action in 75 countries
and carried out detailed market research to understand what is going on.
This unique report on how to make money in RFID is packed with facts and
analysis. IDTechEx, a consistently profitable RFID business, explains the
trends, opportunities and tools for optimization of cash generation. It
reveals the rationale behind the sudden increase in both fund raising and
acquisitions in RFID and who is doing what and why - also what should come
next. IDTechEx analyses how to benefit from the trends, interpreting the
disruptive new technologies and its 10 year market projection. This lucid and
informed examination of how to succeed in RFID should be required reading for
all seeking to maximize their contribution to this exciting sector and create
enduring profitable growth, from manufacturers to consultants and investors.
The 227 page report contains over 65 tables and figures comparing the
performance of more than 40 RFID companies in order to explain product
positioning, future market opportunities, dangers and other signals ahead.
The following 90 companies involved in RFID are referred to in the text:
ACG Identification Technology
AeroScout
Alanco Technologies
Alien Technology
Allflex
Applied Digital
ASK
Assa Abloy
Avery Dennison
AVID Wireless
AWID
Cisco
Denstron
DynaSys
Ekahau
EM Microelectronic
Emirates Technical Innovation Centre
EMS
EXI Wireless
G2 Microsystems
Gemalto
Giesecke & Devrient
HID
Hitachi
IDTechEx
IDVelocity
Impinj
Indala
Infolink Systems
Innovision
InSeal SAS
InSync Software
Intellident
Intermec
KSW Microtec
KTP
Lockheed Martin
Linpac
Manufacturing centre of Excellence
MarkIV Industries
Matrics
MeadWestvaco
Metget
MetroLogic
Mu Solutions
MIT
NCR
Nissan
NTT Data
Oat Systems
Omnikey
Omron
OrganicID
OTI
PanGo networks
Philips Semiconductors
PolyIC
PSC
Quatrotec
Radianse
Raytheon
RFID Journal
SAMsys
SATO
Savi Technology
Schwab
Siemens
Sirit
Smartag
Soartech
Sokymat
Sony
Sygade
Symbol Technologies
3M
TAGSYS
Texas Instruments
ThingMagic
TradeWind Technologies
TransCore
Trenstar
Trierenberg Group
Tyco ADT
Ubisense
Verichip
VeriSign
VisibleRF
WaveID
WhereNet
Xterprise
Table of Contents
Table of Contents
EXECUTIVE SUMMARY AND CONCLUSIONS
1. INTRODUCTION
1.1. The breakeven curve
1.2. Type of business
2. PRODUCT AND BUSINESS POSITIONING
2.1. Methodology of the Strategic Planning Institute
2.1.1. Product positioning is more important than anything
2.1.2. Detailed SRI findings
2.2. Redefining the battleground
2.3. V curve of sustainable profitability with size
2.3.2. Minimum size for enduring profitability
2.3.3. Setting up a service business is easier
2.3.4. Riding the V
2.3.5. Lessons from interrogator manufacture
2.3.6. RFID inlets
2.3.7. RFID tags
2.3.8. RFID system integrators and systems suppliers
2.3.9. Niche and volume RFID activities, actual and wannabe
2.4. Experience curves
2.4.2. Care needed
2.4.3. Racing down the experience curve
2.4.4. Puncturing the dream of the one cent chip tag
2.4.5. No guarantees
2.5. Disruptive products
2.5.1. Parasitic WiFi RFID
2.5.2. Near Field UHF RFID
2.5.3. Near Field UHF RFID vs HF for Item Level Tagging
2.5.4. Printed Thin Film Transistor RFID
3. EFFECT OF COMPETITION AND MARKET GROWTH RATE
3.1. Methodology of Boston Consulting Group
3.2. Useful guidelines
3.3. Areas of over and under supply
4. OPTIMUM POSITION IN THE VALUE CHAIN
4.1. Dynamics of the RFID value chain
4.2. Radical changes ahead for the RFID value chain
4.3. Optimum acquisition strategy
4.3.1. Some significant acquirors and their rationale
APPENDIX 1: HOW EVOLVING RFID LEGISLATION CAN AFFECT THE VALUE OF INVESTMENT IN RFID
APPENDIX 2: IDTECHEX PUBLICATIONS
APPENDIX 3: GLOSSARY
TABLES
1.1. Examples of fund raising in 2006 by RFID-related businesses
2.1. Correlations between profit, cash and other business variables.
2.1. Comparison of potential features of HF and NF UHF item level tags
2.2. SAMsys financials
2.3. Financial results of SIRIT
2.4. Examples of niche and volume players in RFID by value of sales
3.1. Some areas of over and undersupply in RFID in 2006
4.1. Some of the more significant acquirors and their rationale.
5.1. Characteristics of applicational sectors from the IDTechEx RFID
Knowledgebase of 2000 RFID case studies. Those with legal push are shown in
green. Those with many profitable suppliers are shown in yellow.
5.2. Recurrence of profit as a function of frequency of operation of the
RFID system
6.1. Details of the special needs often encountered in some medium volume,
high value RFID markets
6.2. Active RFID market by value 2006 and 2016 and share of overall RFID
market
FIGURES
1.1. Basic breakeven curve.
1.2. A more realistic breakeven curve
1.3. Typical fund raising and size of ultimate business for companies with
various types of activity
2.1. V curve of maximum enduring profitability with size of business
2.2. The steepening of the V curve as markets mature
2.3. Steep V curve for dairy companies in 1974
2.4. V curve for some airports
2.5. V curve for RFID interrogators
2.6. V curve for RFID inlets
2.7. V curve for RFID tags
2.8. V curve for RFID systems and systems integrators
2.9. Experience curve for crushed limestone
2.10. An experience curve for integrated circuit manufacture plotted by BCG
2.11. Extrapolation of historical integrated circuit experience curves
showing the unlikelihood of 0.2 cent RFID chips at realistic volumes.
2.12. Global demand for RTLS systems including tags in millions of dollars
2006-2016
2.13. AeroScout WiFi RTLS tags including, at right, one with alarm button
2.14. AeroScout WiFi armbands
2.15. The HF tag that is fitted to Viagra
2.16. Early pallet/ case tag at top compared with item level tag at
bottom, both being Far Field UHF constructions
2.17. Demonstration of NF UHF multitag reading of tagged balls in water by
Impinj. The reader is the black base to the water tank
2.18. Second demonstration of NF UHF multitag reading on small items by
Impinj
2.19. TAGSYS AK Tag Module on a FF UHF antenna
2.20. One of the Impinj designs of FF UHF label for pallets and cases
compared with its design of an H Field NF UHF label for small items.
2.21. Combined NF/FF UHF labels and, top right, an H field NF UHF label
2.22. The KSW Microtec combined UHF tag Taurus "!
2.23. Global UHF allocations of license free bandwidth
2.24. The TAGSYS HF tag that it claims is the smallest EPC inlet in the
world
2.25. Experimental printed TFTC RFID
3.1. Market growth rate against size vs nearest competitor
3.2. Boston matrix for innovators creating a new market
3.3. Boston matrix for followers
3.4. Examples of matrix positioning in the RFID industry
4.1. Today's RFID value chain
4.2. Detailed value chain and dynamics
4.3. Detailed value chain for materials aspects
4.4. Evolution of the RFID value chain to eliminate the silicon chip
4.5. Evolution of barcode labels and chipless RFID labels
4.6. All eyes right for acquisitions (almost).
4.7. Some RFID acquisition activity on a Boston matrix
6.1. Some volume applications of RFID commencing in the next few years
6.2. Value of RFID tag and other market, dollars billions 2006-2016
6.3. Number of tags by item, pallet/case and other, billions 2006-2016
6.4. The smaller categories in number of tags 2006-2016
6.5. Value of the smaller categories of tags 2006-2016
6.6. Technologies that leverage active RFID in today's new devices.
6.7. Breakdown of the value market for active RFID 2016
7.1. Sokymat statistics
7.2. Sokymat mission
7.3. Sokymat market sectors
7.4. AeroScout WiFi RTLS tags
7.5. AeroScout WiFi armbands
RFID Profit, Fund Raising and Acquisition Strategy published by IDTechEx Ltd. in January 11, 2012. This report consists of 227 Pages and the price starts from US $ 1145.
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