RFID 2014 State of the Industryrainrfid.org/wp-content/uploads/2015/07/ChainLink... · 9/9/2014...
Transcript of RFID 2014 State of the Industryrainrfid.org/wp-content/uploads/2015/07/ChainLink... · 9/9/2014...
Dramatically improving supply chain performance through real-world research
RFID 2014 State of the Industry
Bill McBeath, Chief Research Officer, ChainLink Research
September 9, 2014
© ChainLink Research 2014; All Rights Reserved Slide 2
Agenda
• Market Observations
• Market Growth
• RFID Value Chain Structure
• Innovation, Current and Future
• Implications for End Users
• Implications for Investors
• What's on the RFID Research agenda?
© ChainLink Research 2014; All Rights Reserved Slide 3
MARKET OBSERVATIONS
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Some Market Observations
• Retail RFID is ‘in the tornado’
• Next Killer App is TBD
• IoT is Huge Catalyst for RFID Growth
• Out-dated Views of RFID Persist
• Moving from general-purpose to application-specificreaders
• Alternatives to handheld readers for retail are coming
• Cloud + RFID increasing in importance
• Vertical solution providers are making money. HorizontalVARs struggling.
© ChainLink Research 2014; All Rights Reserved Slide 5
MARKET GROWTH
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UHF Passive RFID Perspective
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Auto-IDCenter
Established
Class 1 Gen 2ratified byEPCGlobal
ISO 18000-6c ratified
Walmartand DoDsupplychain
mandatesbegin
Marks andSpencer
inventory pilot
Gen2V2ratified by
GS1
4.4B tags/y
500M tags/y
WalmartHH
apparelinventorybegins American
Apparel fixedinfrastructure
pilot
M&S to tag100% of
inventory –400M tags
AmericanApparel reports14% revenueuplift in field
test
MCS chip-based
serializationpact
Walmartpulls back
supplychain
mandate
Class 1available(Alien)
Class 0Available(Matrix)
GS1 &EPCGlobal
merge
Checkpointbuys OatSystems;Tyco buys
Vue
Honeywellbuys
Intermec;SML buysXterprise
Zebra buysMotorolaSolutions
Motorolabuys
Symbol
GP readerpricesdrop
Intellaunches 1st
UHF RFIDreaderchip
ImpinjbuysIntel
Rdr chip
Alienannounces
500M unit, 5₵ “Squiggle” tag
order fromGillette
150 Billion RFID Tags Will be Deployed in this Decade
Smartracbuys UPM
Asian inlaycapacityramps up
Symbolbuys
Matricsfor
$230M Zaraannounces2000-store
rollout
MacysannouncesacceleratedRFID plans
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0 M
5,000 M
10,000 M
15,000 M
20,000 M
25,000 M
30,000 M
35,000 M
40,000 M
2013 2014 2015 2016 2017 2018 2019 2020
U
n
i
t
s
Years
Six Year Passive RFID Forecast
Passive Tags w/ Sensors
UHF BAP
μWave Passive Tags
UHF Passive Tags
HF Passive Tags
LF Passive Tags
RFID Unit Forecast
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Market Segment Share – Total Passive Market
Market by Industry- All Frequencies
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Falling Prices, Purpose-driven DesignImprove UHF Reader Price-Performance
• Integration reducesreader BOMs
• Eroding reader chipASPs (~50%/5yrs)
• Expanding form-factor andprice/performancediversity
Special-purposereaders
-9% CAGR
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Embedded RFID to Swell Number ofUHF-RFID Enabled Devices
thousands
Mainly general-purpose readers,some handhelds
Growing diversity ofpurpose-designed
readers
Embedded RFID(IoT-related)
Fixed infrastructuredeployment
30% CAGR
80% CAGR
49% CAGR
© ChainLink Research 2014; All Rights Reserved Slide 11
RFID VALUE CHAINSTRUCTURE
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UHF RFID Ecosystem Structure
IoT Platform Software and/or Service Provider(Axeda, Digi, Gurtam, ILS Technology, InSync, Modus, Omnilink, Spireon, ThingWorx Transcends, Ubidots, WebNMS,
Zebra Zatar)
Vertical Solution Provider(Checkpoint, FileTrail, Lyngsoe, Seeonic, Stanley B&D (AeroScout), Terso, Tyco)
General System Integrator(Accenture, CACI, HP, IBM, ITT, Oracle, SAIC, SRA)
Enterprise Software (with RFID Support)(IBM-WebSphere, Microsoft-BizTalk-RFID, Oracle-Enterprise 1, SAP-AII)
Converter-Service Bureau(Avery, CCL, Data2, George Schmitt,
Kennedy, MPI, Print-o-Tape,Repacorp, r-pac, RR Donnelly, SML,
Top Flight, Weber)
Tag Chip Vendor(Alien, EM Marin,
Impinj, Hitachi, NXP,Tego)
Inlay Contract Manufacturer(Arizon, Shang Yang)
Inlay Vendor(Alien, Avery, Invengo, Shanghai Boing, SMT, Trace)
Hard tag Vendor(Confidex, Datamars, HID, OmniID, Tyco, Xerafy)
Example companies are meant to be illustrative, not comprehensive
End UsersHardware Vendor
(Alien, ATID, AWID, Caen,CSL, Deister, Kathrein,Motorola, Honeywell,Impinj, Times-7, TSL,
Siemens)RFID Software Vendor
(InSync, Nofilis, Seagull)
Horizontal AIDC VAR(Barcoding Inc., Fluensee,
GlobeRanger/Fujitsu, RFID GS)Reader Chip Vendor
(AMS, Impinj,PHYCHIPS)
© ChainLink Research 2014; All Rights Reserved Slide 13
INNOVATION, CURRENT ANDFUTURE
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Innovation not Slowing
• Total applied tag cost– Encoding speed and reliability
– Die attach innovation
– Antenna/substrate innovation
• Cloud solutions– Over 60% of vendors at RFID J Live had SaaS
– IoT platforms
• More sensitive chips and tags– Enables smaller tags, more applications
– Shifts performance burden to readers
• Embedded RFID – RFID in the IoT– When RFID is just a feature
© ChainLink Research 2014; All Rights Reserved Slide 15
Innovations to Watch For
• Gen2V2– Standard ratified, products in development
– Cryptographic tag authentication (small cost adder)
– Extensive memory security and access options (large cost adder)
• Fixed infrastructure – readers in the ceiling– Smarter readers with steerable beams
– Lots of dumb readers?
– Drones? (Some surprising potential there)
• Data analytics– Item intelligence
– Activity as a leading indicator of sales
– May require fixed infrastructure for full realization
• RFID as a Service (RaaS)– Financial innovation can flatten capital investment hurdle
© ChainLink Research 2014; All Rights Reserved Slide 16
IMPLICATIONS FOR ENDUSERS
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Implications for Retail
• ROI is very strong for certain categories– High mix complexity
– Solid business case can be made today
• Don’t underestimate rollout efforts– Associate training is critical to achieve high inventory accuracy
– Don’t expect suppliers to tag (unless you are private label)
• Supply chain implementations in some private labelchains
• Will suppliers reach a ‘tipping point’?– % of total items being tagged
– Ability to realize an ROI (chargeback reduction)
– Industry-wide outreach efforts brewing
© ChainLink Research 2014; All Rights Reserved Slide 18
Implications for Manufacturing
• Proven use cases abound– Asset tracking
• containers, raw materials and components, finished goods, tools
– Visual RFID replacing paper
– Mass customization
– Feeder line synchronization
– Item-level process control
• RFID readers embedded in production equipment
• Majority are closed-loop today … looking at open-loopapplications– Manufacturers putting RFID in the products
– Adding intelligence and functionality to products
– Protecting brand
– Ensure authentic parts/supplies used
© ChainLink Research 2014; All Rights Reserved Slide 19
IMPLICATIONS FORINVESTORS
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What is the Internet of Things?
Broadband internet
Ubiquitous, low-cost cellular & WiFi
Short range wireless networking
Cheap, standardized electronics
Lightweight comms protocols
Advanced sensors
RFID
IoTIoT
25 years ofconvergentevolution oftechnologies andmarkets
RFID is Part ofthe Internet of
Things
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RFID is Part of the Internet of Things
Internet
Communicationsinfrastructure
IPIP
Gateway(Reader)
Sensors(tags)
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Corporate Titans are Investing Billionsin IoT R&D and Marketing
Firm Activity
IntelChips and gateway product roadmaps for IoT. Partnerships to build a wholeproduct for IoT apps. RAIN Alliance founding member.
GoogleMassive acquisition program including robotics, AI and smart home products.Wearables. Stated vision to build a “real life internet.” Rumored IoT platformdevelopment. RAIN Alliance founding member.
MicrosoftRenaming “Embedded Team” “IoT Team” and staffing up. Expanding focusfrom industrial to consumer. Integrating embedded with Azure. Rumored majorsoftware IoT platform development. Wearables R&D. Biz Talk Server/RFID
CiscoPromotion of “IoE” (“everything”) thought leadership messaging. Networkproduct development including IoT gateways. RFID data center deployment
SAPInvestment in development of real-time, contextual data analytics for processcontrol. Thought leadership messaging. AII RFID platform
IBMWatson AI, sensor business unit, M2M system integration. Lightweightcommunications protocol development. WebSphere RFID support
GEAllocated $1B for “Industrial Internet” targeting aviation, healthcare, rail, power,oil & gas. RFID solutions for healthcare, oil and gas, others.
Source: Company web sites, interviews, public news sourcesRAIN: RAdio-frequency Identification Alliance
In every case RFID is part of the story
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Signposts for Investors
1. A Broadly growing base in global healthcare,banking, government, biosciences, oil & gas,aerospace, automotive, IT and more
3. Activeinnovation andre-investment
2. Exponentialgrowth inretail
5. Compellingupwardmomentum
Inte
rnet
ofTh
ings
4. A Coordinatedecosystem
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WHAT'S ON THE RFIDRESEARCH AGENDA?
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What is the Market?
Where will the growth be?
Which segment should we focus on?
What does it take to enter thatmarket segment?
Is my solution complete?
Who are the buyers?
What is the
Value?
The Challenge for RFID Solution Providers
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What are our current business drivers, challenges andgoals
What should our roadmap look liketo achieve these goals?
Who are the providers
who can deliver the
Value
The Challenge for End Users
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What’s on our Agenda
• Webinar Education Series on RFID Markets and Solutions
• Internet of Things research:– What is it? Creating a framework for IoT landscape.
– Platforms
– Applications
• RFID research:– Fixed Reader Infrastructure Economics for Retail
– RFID Market Growth 2014 -2018 Passive and Active Markets
– Industry/use-case specific market growth and solutions:
• Retail
• Healthcare
• Manufacturing
• Logistics & Transportation
• Oil and Gas
© ChainLink Research 2014; All Rights Reserved Slide 28
About ChainLink Research
Questions?
617-762-4040 x414
ChainLinkResearch.com/rfid