RFID swings into 2004 with mixed hopes

If 2003 was the year the market awakened to supply chain-based RFID, 2004
will surely be the year it readies for school. The two mandates for 2005, set by
Wal-Mart and the U.S. Department of Defense (DoD), pushed RFID into the public
eye, and moved it from company science experiment to boardroom priority, with a
focus on improving enterprise-wide operations.



Now, manufacturers, the suppliers to Wal-Mart and the DoD, are diving into an
increasingly busy RFID market already brimming with developing standards, large
company entrants, start-up software developers, and numerous systems
integrators. Despite some recognizable large company names, success is still to
be determined, says technology research firm ABI.



Texas Instruments, Symbol Technologies, NCR, Philips, Sun Microsystems are only
some of the big-name companies that have entered the world of RFID. Some
recognizable names have entered the RFID fray as systems integrators, namely
IBM, Accenture, BearingPoint, Unisys, RedPrairie, and Manhattan Associates.
Process questions abound, such as where to store the data, what data should be
stored, how to secure and maintain data, and what is the optimal method to
integrate data with existing business solutions.



Some integrators, such as SAP, are developing enterprise-level RFID patches for
customers. There are others, known as warehouse management systems companies,
which include Manhattan Associates, RedPrairie, and Provia. Long-time DoD
integration partners such as Unisys, Lockheed Martin, and Accenture are stepping
up government-based RFID efforts.



"Due to the time constraints and the still-developing standards, prior
relationships will drive RFID integration contracts even more than with previous
rollouts, such as ERP or supply chain management systems," notes Erik
Michielsen, ABI senior analyst. "This is not necessarily good for the RFID
business, as the process discourages competition and rewards relationships over
capabilities. The upside is that established relationships will better enable
scalable, successful solutions due to better understanding of environment,
staff, and business goals."



Another complex issue is that RFID is new and there have been few full-scale
projects to date, especially for supply chain solutions. While integrators such
as SCS, Unisys, or Lockheed Martin have extensive, long-term relations with the
DoD, they do not have extensive experience with passive, UHF RFID tags. The
leading supplier lists for Wal-Mart and the DoD are long, and integration
solutions must conform more than differentiate if these projects are going to
roll out to specification and on time.



ABI's report, "RFID:
Emerging Applications Driving R&D Investment and End-User Demand,"
follows the technology for applications including asset management, supply chain
management, and point-of-sale. The study breaks down RFID standards,
applications, and vertical markets, and provides marketplace forecasts through
2008. Reader shipments and revenue are provided, as well as data on different
RFID transponder and component markets. In addition, selected RFID vendors,
integrators, developers, and IC manufacturers are analyzed, along with their
various technologies and product offerings.



Additional information on the RFID landscape can be found in an upcoming report
from ABI, "RFID
Vendor Assessment: Analysis of Major Players' Strategies, Positioning, and
Technologies." This study examines
the leading RFID companies and their ability to provide solutions required for
Wal-Mart's RFID mandate.



Source: http://www.abiresearch.com/