Let the RFID Cycle Begin - Intemec

Let the RFID Cycle Begin - Intermec

RFID a great growth market

A new revolutionary technology is forming called RFID or Radio Frequency Identification. This technology greatly improved the ability to track items, any item. The current leading market solution uses a one way system where, for example, a simple "bar code" at your local grocery store where the grocery clerk has to run the bar code over a scanner. These readings are very man-hour intensive as each individual item must be scanned RFID is a two way system where a reader could scan every item at a Wal-Mart (WMT-48.14) store. Then each item with a RFID tag would respond or "chirp" back to the reader. Using the two way RFID system a single person could take complete inventory of a store almost eliminating all the man-hours of manual inventory. A reader mounted on a fork lift truck would track each item the hyster moves into the warehouse. The RFID will allow a single person the ability to inventory unlimited amounts of items.

Using our simple forecasting theorem which mathematically helps us forecasts how successful technologies will be; our approach signaled that RFID will be revolutionary.

Please refer to forecasting a revolution Multiplication of Moore's law http://www.durig.com/duriglaw.html .

Here are some of the many uses of RFID. Tracking gamblers at a black jack table so the house knows who's betting big, tracking prisoners in a jail to see who was involved in a scuffle, tracking prescription drugs for counterfeit, tracking cattle for mad cow disease, tracking cars so police could immediately identify a stolen car or a car with outstanding issues. More examples, tracking passports to see if the picture is correct, tracking products for Wal-Mart to almost any store and warehouse, tracking the Department of Defense inventories for most items, Boeing can track parts for building aircrafts and Ford tracking parts for it automobiles. It appears that both the scope and magnitude at this time is limitless.

Industries tracking consumer goods from shoes to cement blocks to frozen food to cars, including boats, planes, parts and supplies can utilize it in all aspects from manufacturing, inventory and shipping to retail outlets.

Judging from our theorems, RFID will see revolutionary growth to the likes of the cell phone, Personal Computer and the Internet that also at the beginning of their cycles scored extremely high.

IdtechEx forecast

From IdtechEx, the market for RFID is to grow from 2.7 billion in 2006 to 12.3 billion in 2010. The value is expected to be about 26.2 billion in 2016 or ten years to grow almost 10 times.

Selecting the company that could lead that market

Identify the correct market to invest is only part of the challenge. Possibly the bigger challenge is to identify the company that will lead this technology. This is where we have identified Intermec. Intermec is one of the leading companies in bar codes. Over the last few years Intermec has been focused on developing products that would comply with the new Gen 2 RFID standard rather than introduce products that supported the older Gen 1 Class and 0 Class protocols. This strategy has allowed Intermec to utilize its roughly 149 patents to allow Intermec to extract royalties from the entire RFID industry and appear to be essential when utilizing the Gen 2 RFID standard. The Gen 2 RFID standard and Intemec's patents are very co-depended of each other. In my opinion Intermec is gaining an integration monopolistic position.

Why monopolies have great success

Past monopolies have had great success from controlling the market like Intermec integrating their solution into and then helped become part of the standard. Compared to war it is the equivalent of having the high ground in battles - this approach is extremely valuable. Control in new revolutionary technologies is very rare. Our studies shows that in the past when companies achieved control they are usually able to hold it for 1-2 business cycles or from 9 -19 years. Some past successes that have demonstrated integration and or control of revolutionary products were Microsoft (MSFT-27.13) and Intel (INTC-19.78) in the Personal Computer, Cisco (CSCO-21.44) for the Internet and Qualcomm (QCOM-49.87) currently for Cell Phones. When I was young child IBM (IBM-84.32) controlled the standard for Mainframe and AT&T (T-26.81) the phone business. You can often see companies that are monopolistic in a revolutionary industry have a probability of achieving super wealth. Several monopolies we listed achieved the world's largest stock value.

Is Intermec a new monopoly?

Intermec or any company for that matter to have a chance to be great monopoly it must have a degree of control. The question is how much control does Intermec have over the RFID industry?

To answer this simple but very important question we devised an extremely effective test. Intermec claim's to be an integral part of the Gen 2 standard. The definition of de facto standard is recognized by all its peers as the standard.

Does the RFID industry recognize Intermec as the standard?

Companies like Symbol Technology (SBL-10.64), Zebra Technology (ZBRA-45.45), Philips Electronics (PHG-32.38), Texas Instrument (TXN-30.59) are some of the leading companies in RFID space that also have the size, technical background, law staff and other resources to verify or reject Intermec's claim. Accepting Intermec's claim means paying royalties to Intermec for years, you must understand if possible all theses companies would NOT want to pay royalties so their preferences is to reject Intermec's claim.

All the companies mentioned above and more have agreed that Intermec will receive royalties on every Gen 2 RFID product they make. No one wants to pay 2.5-7% royalty to Intermec to utilize the Gen 2 RFID standards. Especially leaders in RFID like Phillips, Texas Instrument and Symbol which all have a major leading position in the market, and their agreements with Intermec greatly validated Intermec's claims.

It was when the largest company and Intermec's closest competitor, Symbol Technologies, that created the biggest challenge to Intermec's claims. Symbol Technologies not only refused to pay early in the process, but sued Intermec asking for Intermec to pay Symbol royalties for their many patents and Symbol wanted their own version of the standard.

Symbol gave up their court fight and agrees to join Intermec's Rapid Start Licensing program. When your biggest competitor allows you to sign a controlling contract where Symbol has to pay royalties to Intermec every time Symbol sells a RFID hardware product. To me the Intermec/Symbol relationship Intermec has provided validation with a very high degree of control.

Many experts assign a similar agreement to the rise of Microsoft and the downfall of IBM when IBM accepted the Microsoft PC standard. I believe history will say the same thing when Nokia (NOK-20.52) then the largest cell phone company in the world signed and agreed to pay royalties to Qualcomm on all Nokia 3G phones.

It reminds me of a very old saying "the king is dead, long live the king" if you can dictate your will to the powerful companies your have a high degree of control.

Gutter vs. Shingles

Intermec is using their RFID control to establish what I call a gutter business. In Oregon it rains a lot and what we know are roofs. Water from shingles flow into a gutter. In some cases the gutter and shingles are co-dependent and need each other for the roof to work properly. First gutters have tremendous leverage. Second you could measure the number of shingles or measure the square footage of the roof to understand the amount of possible water flow or leverage the gutter might achieve We believe gutter based companies are far better companies to own. If you wanted fill a cup of water would you put your cup under a shingle or a gutter? It's my believe that by far most companies are shingles business models, but the gutter business model have far great potential to grow profits utilizing and leveraging the shingles.

In a few situations all the shingles combined could flow into a single gutter. A roof with a single gutter or a monopoly has one of the best business models and has a chance to leverage the entire industry to enrich its profits.

Intermec is possibly building this type of business model and has awarded the premier client of Cisco, and IBM while having alliances with Microsoft, Oracle and SAP. Companies that joined Intermec's Rapid Start Program and agreed to pay Intermec a royalty on every RFID hardware product they sell.

? Accu-Sort

? Avery Dennison

? AWID

? Datamax

? EM Micro

? Feig Electronics

? Hand Held Products

? LXE

? Metrologic

? Paxar

? PSC

? Psion Teklogix

? SAMSys

? Sato

? Symbol Technologies

? Texas Instruments

? ThingMagic

? Toppan Printing

? Zebra Technologies

All of these agreement occurred in 2005 after the new Gen 2 standards for RFID established in early 2005.

If we are right Intermec should have outstanding and accelerated growth for the duration of the Gen 2 RFID standard business cycle possible Gen 2 Standard last about 9 years based on many business cycles we followed.

Risk

Intermec's placement and degree of control in the Gen 3 RFID standard is very unclear, and will take many years from now to achieve any clarity.

A company could challenge Intermec's legal position. Even though Intermec has about 149 patents in the RFID industry the largest IP portfolio, a single company could sue making Intermec's patent unenforceable. Knowing that Symbol Technologies is well funded and a leader in the RFID industry and has attempted this and failed, it makes the hurdle even higher for a smaller less funded company to attempt this knowing that it would be a very costly approach.

Intermec appears to limit the companies that license their technology especially during their Rapid Start Program. If in future years Intermec is found to be a monopolistic company this could be very damaging in a court system. Intermec should give every company an equal chance.

RFIG Gen 2 is still not Intermec's core profit center and there are no guarantees that RFID will become revolutionary. Most all new technologies have gone through long incubation cycles before becoming mainstream which RFID Gen 2 will probably incur.

In my opinion the great appreciation will come when the royalties are the main profit center, and that may be many years if it ever occurs.

Conclusion

To summarize

1. The RFID appears to approaching a revolution growth cycle.

2. Intermec is the technology patent leader and has degrees of control over the Gen 2 RFID Standard.

3. Intermec is forming a gutter business model combined with a possible monopoly position giving Intermec the ability to have possible leverage over the entire RFID industry

If Intermec could achieve the three items above it has a chance to achieve

a: Modern Monopoly Effect.

A Modern Monopoly Effect is when a single monopolistic company achieves a stock market value roughly equal to all the companies' market value that supports the standard. In Intermec's case Intermec could achieve stock market values about equal to all RFID hardware partners businesses that supports Intermec Gen 2 Standard for RFID.

The water from all the shingles on a roof could roughly equals the water flowing into a gutter, a single monopolistic gutter named Intermec.

If Intermec becomes a Modern Monopoly Effect possibly it will become the fifth time we have identified and owned a Modern Monopoly Effect.

Randy Durig manages the Monopoly Technology and Monopoly Blue Chip Portfolio's He tries to own companies that measurably have control or monopolize their markets.

Monopoly Blue Chip Portfolio National Performance Rankings: 3rd

In the United States, Ranked by 3 year annual return , for Large Capitalization Blend, 4th Quarter 2005, By Money Manager Review

Durig Capital is a registered investment advisor. If you know someone that would like our research services just enclose the name, day time phone, and email or rdurig@durig.com or call toll free 877-359-5319

Randy Durig owns Intermec, Qualcomm and Cisco in discretionary client's portfolios and in his own account. Past performance is not a guarantee for future returns. All information we believe to be correct but make no guarantee to accuracy

For more information about monopoly investing please visit http://www.money-manager.us, http://www.durig.com,& http://www.investment-investment.us

Xterprise Announces Most Comprehensive RFID AnalytiX™ Product in the Market

Dallas, TX (ContentDesk) April 20, 2006 -- AnalytiX is a data analytics product targeted to assist retail suppliers shipping RFID products to Wal-Mart and other retailers by monitoring and quantifying the benefits of using RFID within retail supply chains.Unlike other RFID analytics offerings in the market, Xterprises AnalytiX product provides the most innovative user interface, the richest retail RFID analytics available in the market and the first of its kind monitoring of production source tagging solution performance. The product is fully compatible with Wal-Marts Retail Link as well as many Enterprise Systems data interfaces such as SAP.Xterprise is currently working with members of the Wal-Mart top100 in pilots and will demonstrate the product at both the EPC Technology Expo/Wal-Mart supplier forum (Dallas, April 25-26) and RFID Journal Live (Las Vegas, May 1-3).RFID AnalytiX is being launched under three deployment models:" Traditional License - for those customers who are already shipping RFID tagged product to retailers and are ready to start turning the sea of data into valuableinformation a site license of the application can be purchased" Software-As-A-Service - Customers can also purchase the benefits of the application by entering into a 1 year or 2 year professional services engagement and drive the same value through this alternative deployment model." Pre-Start pilot program - for suppliers who have not begun sending RFID tagged product to retailers.The innovative pre-start pilot is a turnkey offering for suppliers who want to measure the true opportunity value that tagging product for Wal-Mart provides. Under pre-start model, Xterprise will help label a number of full pallets of product and then use AnalytiX to watch tagged product move through Wal-Mart supply chain. The resultantinformation provides definitive data on where the opportunity is for tagging product to reduce out of stocks at retailers and what source tagging level would best drive value for the company.Through our discussions with retail suppliers over the last three years, one thing is clear: they do not know what really happens in the last 100 feet of a Wal-Mart store and that makes it very difficult to determine what is the correct RFID source tagging strategy and how much sales could be generated by tagging product, stated Dean Frew, Xterprise President and CEO. We developed AnalytiX and this Pre-Start program so that we can help our clients manage through these questions by using AnalytiX generated facts.

A common example of the products value is when we show data that determines the promotional product inventory is not being replenished efficiently and helping merchandisers better estimate sale lost due to supply chain inefficiencies.AnalytiX is a supply chain application built on top of the most recent SQL Server platform, SQL Server 2005. It leverages the new Integration Services toolset to extract and meaningfully transform raw data from any number of internal, retailer or other external data sources into a clean, consistent and coherent data warehouse. The AnalytiX data warehouse is closely monitored and maintained to ensure data quality. It is continuously updated to reflect changes in the RFID landscape and supply chain processes.The AnalytiX product leverages the new Reporting Services toolset to deliver a comprehensive set of standard and ad hoc reports. In addition it utilizes the new Analysis Services to provide powerful OLAP reporting capabilities.

All of this reporting functionality can be securely accessed via an intuitive, easy to use, web based portal.Nearly every customer we talk with is trying, with little success, to use the RFID read data to create competitive advantage in the marketplace. Our team has built the AnalytiX product to address these broad reaching market needs, said Steve Hall, Xterprise SVP of Global Sales. The initial response from clients when they see the product has been extremely positive.About Xterprise -- Xterprise Incorporated, an industry leading developer of Radio Frequency Identification (RFID) supply chain solutions is the RFID solution provider for many of the worlds most respected supply chains and fastest growing companies.Xterprise is known for understanding the complex business problems their customers need solved and then using ground-breaking technology to create those solutions.Xterprise takes pride in the ability to merge best practices, supply chain processes, material handling, system hardware and RFID Service Oriented Architecture (SOA) application software, enterprise systems integration, data analytics, demand signaling applications and remote solution support.With clients in Asia, Europe, and throughout North America, the worldwide headquarters for Xterprise is located in Carrollton, TX. For more information, call 972-690-9460, ext. 300 or visit the website at www.xterprise.com

Viagra and RFID tags

Viagra's popularity is a known fact. Ever since its launch in 1998 by Pfizer Inc., the erectile dysfunction(ED) drug has performed miracle in the sexual life of millions of its users. The proper usage of Viagra can help in overcoming the ailment of ED to a large extent. Its effectiveness in the treatment of ED is unparallel and due to this factor, lots of dubious companies are making huge chunk of money by manufacturing fake version of it.

Due to this rising business of fake drugs, big companies like Pfizer are incurred with heavy losses as the fake versions of Viagra are available at a much cheaper price. It is a big blow for the company's financial status as the making and manufacturing of Viagra is an expensive affair.

Therefore, to overcome this counterfeit business, Pfizer Inc., the manufacturer of Viagra has begun to ship its Viagra product with radio frequency identification (RFID) tags to its customers in the U.S. It's part of the company's initiative to promote patient safety by combating pharmaceutical counterfeiting. Pfizer is following on the heels of Purdue Pharma, which began tagging every 100-tablet bottle of the painkiller OxyContin since 2004 for controlling the fake drug business.

The reason behind Viagra's selection for the RFID project is because of the fact that it has been a major target for counterfeiters. The benefit of RFID tag is that it discourages counterfeiting because it is both difficult and expensive to duplicate. RFID tags incorporate the EPC into each package, case and pallet of Viagra so that pharmacists and wholesalers can use specially-designed electronic scanners to communicate the code over the internet to a secure Pfizer website.

This particular step taken by Viagra manufacturer is praise worthy as it can prevent Viagra users from buying fake version of the ED drug.

For more infomation on Viagra, visit: http://www.viagrapunch.com

The author is an amateur writer focusing primarily on health related topics or on the health related research findings.

American Libraries and RFID Tags

 

RFID Tags seem to be perfectly suited for library inventory control. Many bookstores are planning on having them on every book to prevent theft and keep track of inventory, which makes sense.

Now with this new technology they are teaching the old world all it’s applications and bringing the most unexpected organization into the Modern Age:

http://www.theregister.co.uk/2004/07/09/va...n_library_rfid/

We are seeing TI- Texas Instruments and other companies leading the charge. Even Microsoft is building a custom operating system especially designed to incorporate RFID tags for Small and Medium sized Businesses. With Wal-Mart, Gillette and the Department of Defense moving forward on projects, we are seeing huge increase in the venture capital and investment bank spending on the companies who will be leading the way in this new technology as well as large old companies spending on capital investments in research and development. What is so wonderful is that all this technology will be available to so many other important needs for instance Libraries, book mobiles and School Districts. This is an awesome advantage of transfer technologies and we should be thanking the US Military, Wal-Mart, The Free Market and the Financial Markets for this forward progression to make our lives run smoother and more efficient as we know that budgets are tight and every dollar counts in our libraries and schools.

One new technology being developed by Flash Scan, Corp.

http://www.flashscan.net/

Libraries are much easier to develop the technology for than let’s say Military Humvees, Wal-Mart Wooden Pallets, Gillette’s Fiber Board Pallets. One cannot but be impressed with the ingenuity of American entrepreneurs and the intensive capital being risked on up-coming innovations on nothing more than a chance to play. Anyone who thinks that American Business is down and out need to look no further than their local public library and the new hardware being installed which would make even Carnegie smile.

This white paper on Page: 6 has a couple of paragraphs of what some of these early adopters can expect for Video, Audio and Book Inventory Applications, which obviously lends itself to uses for libraries and school districts from: Zebra Technologies:

http://www.zebra.com/whitepapers/11315Lr2RFIDTechnology.pdf

Now then if we look at the Training Sessions for Homeland Security, FBI, Annapolis Naval Academy, West Point, etc. By allowing the military which is already heavy into the RFID game and is learning a lot and moving the ball forward and allowing some of this basic research and development to be used in their libraries, universities, academies and top notched training facilities, we can have a world class system ready for transferability into other public sectors which can assist streamline efficiencies in education to make good on America’s commitment to the “No Child Left Behind Act” possible by freeing up monies and re-investing those monies into books, educational material for the class rooms so teachers do not have to use their own money. Also by having a more efficient system in America’s libraries, they can afford to run the air conditioning more in the summer thus attracting more people to come and read and better heat in the winter to make it comfortable to stay and read.

RFID makes sense for library inventory control, simplicity and efficiency which will provide greater cost savings to re-allocate for those things they desperately need. RFID on Book Mobiles also makes sense as the entire control system could be run by a PDA Windows CE Program which when not in use can be charged by the cigarette lighter in the vehicle since smoking is not allowed in book mobiles because the paper holds such scents. Any ideas along this line are welcomed.

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/. Lance is a guest writer for < id="link_63" target="_new" rel="nofollow" href="http://www.ourspokanemagazine.com/">Our Spokane