2009 RFID PREDICTIONS FROM THE GUY WHO BROUGHT YOU RFID FOR DUMMIES Written by Patrick J Sweeney II

Tuesday, 27 January 2009  Living just outside of Washington, DC where every pundit with a corner of print or a microphone is compelled to make his or her predictions about what will happen in 2009, I would feel journalistically inadequate if I didn’t take a stab at my predictions. Without getting into my real passion – where the Red Sox will end the season – I’ll do my best to keep this to the area I know best – RFID.

Here are my Nine for ‘09

1. Cisco buys Alien’s reader business – Alien’s tag and chip business is skyrocketing, but they don’t have the distribution channel to compete in the more competitive hardware market. Competition is not that formidable in tags and cost are already sunk into R&D on the Higgs III silicon. They clean up their balance sheet, get a cash infusion and become a tag and chip company. Cisco buys them in a down market, and leverages their infrastructure to further go head-to-head with Moto in the wireless world.

2. Reader manufacturers outsource their RFID – there are too many reader manufacturers and too many board manufacturers. Buckets of money is still being sunk into R&D by the board manufactures; reader vendors can’t match that level of innovation. There are two clear winners in this market – ThingMagic and MTI. Look for them to provide boards for the top three readers in 2009.

3. Three reader manufacturers go away – See point two – too many reader makers. Alien will get bought, Feig will exit the market and Sirit will get bought, possibly in an asset sale. Why? Point one covers Alien or possible Cisco buys Sirit. Feig has a poor product and terrible customer service. The market is too competitive for clients to put up with bad service and a bad product. Sirit has a small portion of the electronic vehicle registration (EVR) market and won’t see meaningful impact from the Department of Defense (DoD) passive RFID IDIQ until September, so at their stock price today it’s a bargain for one of their competitors to buy their R&D and contracts.

4. A million servers are tagged with RFID – The financial services industry has led the way with two banks tagging over 100,000 assets and driving a rapid and tangible ROI. Hosting companies, telecoms, government agencies, and other large data center users are going to follow suit this year. ODIN technologies’ pre-packaged data center solution is already looking like one of our top three products of 2009.

5. The Container World adopts passive RFID – Active RFID and Savi tags can only provide so much visibility, this year passive infrastructure will be leveraged for security and real time inventory. Look for DoD to lead the charge and shipping companies to be fast followers.

6. The DoD begins “Googling their stuff” – GSS Army GS MC is coming online and NMCI is phasing out. This will make RFID applications easier to certify and adopt, and user interfaces will be better. A General in the Pentagon will be able to “Google” any thing they are looking for and find it on a map point, in real time. That has massive implications for the DoD supply chain.

7. Utilities enter the RFID market – this industry is a sleeper largely because of the physics of ground penetration. The good news is the innovation and technology investment are making it viable. This could be the sleeper market of 2009 that no one has even mentioned, despite 3M putting some big bucks into it.

8. An RFID company files an S-1 – who will it be? I’ve got a couple of bets but because of NDAs, market impact, and our tax-evading Secretary of Treasury I won’t say. Short of a total economic meltdown November will bring a road show that leads to a successful IPO in Q1 2010.

9. The Red Sox win their third World Series of the millennium – OK I can’t resist. The Evil Empire opened up their wallet and bought the hottest commodity on the market, but with no middle relief and no young closer the season will come down to the Red Sox middle order against the Ray’s pitching. Mark Shapiro gets manager of the year for bringing the Indians to game seven against the Sox for the second time in three years with half the payroll.