IBM opens test center for barcodes

Lucas van Grinsven

AMSTERDAM: International Business Machines Corp opened a test center for radio tags in Nice, France to keep up with fast growing interest from retailers, manufacturers and transport firms.

Radio tags, supercharged versions of the barcode, can help to track goods, automate banking services, improve product quality and ultimately even prevent someone from washing a new red t-shirt with the white laundry.

"This is acknowledgment that the market is moving so fast that we need more resources," said Faye Holland, IBM's global chief of radio frequency identification (RFID) business. Some 1,000 IBM employees work part-time or full-time on RFID. Top retailers like U.S.-based Wal-Mart, Germany's Metro and Britain's Tesco have said they will use the chips that allow product information to be read automatically and wirelessly by readers built into cargo docks and cash tills or the doors of offices and buses.

The U.S. Department of Defense is planning to require its suppliers to attach RFID tags to their shipments.

Holland said potential customers include all major ports, airports and airlines in Europe and the Asia Pacific region to tag and track baggage and cargo.

"We're talking to all major ones," she told Reuters in an interview.

"Still in 2004 and early 2005 there will be lots of pilots, but by mid-2005 I expect to see a lot of real implementations," Holland added.

STANDARDIZATION

Commercial adoption is expected to accelerate after this summer, when new standards will be introduced to regulate radio frequency bands.

IBM's new test and interoperability lab is another effort to make sure that chips, readers and software work together.

The company has also opened test centers in the United States and Asia, but IBM's Holland said Europe was ahead of those regions in terms of acceptance and interest.

Concerns about privacy, a big issue in the United States, appear to be less prominent in Europe where strict privacy laws have been implemented, she added.

Mass adoption, when every item from stockings and milk carts to credit cards and aircraft engines are labelled with the chips, is still some time away because they are currently priced between 0.10 euro and 0.50 euro ($0.12-$0.61), others said.

"We don't see item-level tracking within next 10 years. But you will see us on high-level items, like jewellery and consumer electronics," a spokesman for Philips' semiconductor unit said.

Dutch electronics maker Philips is one of the producers of RFID chips. Together with Japan's Sony Corp, credit card company Visa and handset maker Nokia it is pushing an advanced version called Near Field Communication (NFC) which can be used for wireless electronic payments and other transactions by using a phone.

Fifty percent of all items will be tagged by 2009, IBM estimates, which is when billions of products will be smart enough to know what they are and when they were manufactured.

IBM said it is also talking to all major pharmaceutical companies to find a better way to track and control drugs shipments. It is adding temperature sensors for new biological drugs that need to be stored in refrigerators all the time.