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The surge of corporate and financial activity within the radio frequency identification (RFID) industry is a signal that the investment community believes that the potential of RFID will become a near-to-mid-term reality, reports market researcher Venture Development Corp. (VDC) in Natick, Mass.
During last May alone, there have been numerous announcements from RFID vendors including Alien Technology Inc. in Morgan Hill, Calif.; Savi Technology Inc. in Sunnyvale, Calif.; and Symbol Technologies Inc. of Holtsville, N.Y., VDC officials say.
Alien Technologies, an RFID inlay, tag, and reader manufacturer, filed its S-1 with the U.S. Securities and Exchange Commission (SEC) in anticipation of the public offering of its stock. With the announcement, Alien has become the first true “pure-play” RFID vendor to go public. Now that Alien has put a stake in the ground, how will the company’s IPO impact the industry and influence the investment community?
In some ways, an Alien IPO might be considered a natural event for an RFID industry finally gaining some momentum. In other ways, an Alien IPO could look a bit like 1999, when hundreds of companies went public despite proven demand for their offerings or a predictable cash flow. VDC analysts say they believe there are cases to be made for and against investing in this offering.
One VDC staffer says he believes the strongest argument in favor of the IPO is not for the potential return on Alien shares, but for the benefits the IPO will offer to the rest of the industry and the investing public.
An Alien IPO will offer perhaps the most accurate bellwether yet for tracking the health and wellness of the RFID market, RFID suppliers, and RFID investment prospects.
Another VDC staffer sees Alien’s maneuver as a positive sign for the industry, yet points out that the IPO has already initiated a new round of intellectual property squabbles. Moreover, Alien has never been profitable, the VDC staffer says. The company’s losses, in fact, have doubled over last year.
In another industry development, major defense contractor Lockheed Martin Corp. of Bethesda, Md., has acquired Savi, which is to become a wholly owned subsidiary of Lockheed Martin, managed by Lockheed Martin Integrated Systems & Solutions business unit.
VDC analysts say there is great synergy between the two companies and say they believe this relationship will generate benefits such as giving Savi access to Lockheed Martin’s GPS/satellite, sense/respond capabilities and command and control algorithms in support of advanced feature supply chain solutions, while helping Lockheed Martin provide RFID technology to its customers.
Also of note in the RFID business, Symbol and NCR Corp. in Dayton, Ohio, signed a reseller agreement that entitles NCR to resell Symbol’s portfolio of enterprise mobility products, which consists mainly of RFID readers and tags.
As a provider of end-to-end, global RFID solutions, NCR’s TransitionWorks portfolio of RFID solutions includes thoughtware, hardware, tags, services and software. Symbol’s enterprise mobility solutions are comprised of advanced data capture products, mobile computers, wireless infrastructure, services, and EPC-compliant RFID products.
The partnership is expected to be beneficial to both companies as well as the end user community in a number of ways several says, VDC analysts say.
First, the partnership will help both companies retain strong positions in the retail market. Second, the companies will be able to provide a more complete solution for their RFID customers. In addition, NCR’s deep industry and deployment experience will be complemented with Symbol’s high-performance enterprise mobility solutions.
For more information contact VDC online at www.vdc-corp.com/aidc/rfid.asp.
Military & Aerospace Electronics August, 2006
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