Victor M. ClaudioChief Marketing Officer,

Sparkice Lab Inc.

ONCE Global Summit 2006 Bangkok, Thailand May 17-20

Victor M. ClaudioChief Marketing Officer,

Sparkice Lab Inc.

ONCE Global Summit 2006 Bangkok, Thailand May 17-20

RFIDRealizing “First Mile” Visibility

• Largest GlobalFixed Line Market

• Largest Global Wireless Market

• Largest Global Internet Market*

393 million In 2005,393 million In 2005,17% Growth17% Growth

393 million In 2005,393 million In 2005,17% Growth17% Growth

125 million In 2005,125 million In 2005,32% Growth32% Growth

125 million In 2005,125 million In 2005,32% Growth32% Growth

Why China? China is the largest ITC market in the world

*Of which, 38mn Broadband. China Expected to exceed U.S. Broadband Subscribers (45mn) in 2006

350 million In 2005,350 million In 2005,12% Growth12% Growth

350 million In 2005,350 million In 2005,12% Growth12% Growth

China – Fastest Growing Broadband Market – 90% Growth Rate

As of Feb 2006: China 400mn+ Subscribers: 20% of Global Total of 2bn.

Dawn of the Global RFID Market

2005: $1.85bn Worldwide spend on RFID ($1.2bn on tags). Source: IDTechEX

2006: $2.71bn Total RFID market value forecast.

1.3bn tags to be sold in a range of diverse markets from baggage, passports, contactless payment cards, drugs, pallets and cases. Source: IDTechEX

2008: $7bn Worldwide RFID market value. 15.3 billion sales forecast for pallet & case tags + 6.8 billion tags for medicine, luggage, animals, books and tickets. Source: IDTechEX

2009: $10bn Worldwide RFID market forecast. Source: Frost & Sullivan

2016: Total RFID market to rocket to $26.23bn from $2.71bn in 2006. (number of tags delivered will be over 450 times the number in 2006). Source: IDTechEX

2010 Forecast – About half of RFID tags to be sold in East Asia, followed by 32% in the US. Source:

IDTechEX

$1.85bn

$2.71bn

$7.0bn

$10.0bn

$26.23bn

0

5

10

15

20

25

30

Y2005 Y2006F Y2008F Y2009F Y2016F

2004 China RFID market exceeded $150mn (1.2 billion Yuan)

933 million Yuan RFID tags, 185 million Yuan RFID readers, & 85 million Yuan RFID software and service. RFID applications mostly in closed and proprietary applications.

2005 China RFID market about $200mn (1.6 billion Yuan).

33% year-over-year growth.

2006 China RFID market forecast $290mn (2.3 billion Yuan).

45% year-over-year growth. (Source: Research & Markets)

2009 China RFID market forecast $663mn (5.1 billion Yuan),

with a compounded annual growth rate of 33.2% (3.807 billion Yuan RFID tags, 684 million Yuan for RFID readers, and 567 million Yuan RFID software and services). Source: Analysis International

Emergence of China RFID Market

Drivers for RFID in China 2006-2007

• 2008 Beijing Olympics (security, ticketing, anti-counterfeiting, food/vehicle tracking, athlete monitoring, logistics)

• Retailer supply chain mandates for suppliers to replace bar codes with RFID

• Livestock tracking: Controlling disease and pandemic key issue in 2005-2006+

• Anti counterfeiting for wine, pharmaceuticals, tobacco

China RFID Growth Demands Strong & Coherent Market Response…

Emergence of an RFID Ecosystem in China necessary to:

- drive technology innovation, - develop and implement interoperable standards- develop partnerships,- facilitate competition, and- bring both new solutions and the application of solutions to the forefront.

RESPONSE: R1 RFID CHINA ALLIANCE ECOSYSTEM

Vision:

Advance industrial and national competitiveness in RFID as a leading edge, emerging technology (RFID key strategic initiative of China’s National 11th Five-Year Plan).

Mission:

Research & recommend Interoperable RFID technology standards and drive RFID take-up through pilot and commercial programs across industry verticals in China.

R1-AllianceEcosystem

R1-AllianceEcosystem

Endorsed and supported by various PRC Governmental bodies including:

Group Office of Golden Card Project

National Development & Reform Council (NDRC)

Electronic Information Products Department of the Ministry

of Information Industry (MII)

State-owned Assets Supervision and Administration

China Information Industry Trade Association (CIITA)

China Ministry of Labour and Social Services (MOLSS)

Unveiling the Foundation Plaque of the R1 RFID China Alliance, Nov 4, 2005 - (from left to right) - Mi Jiangguo, Director General of Information Center, National Development Research Center of the State Council; Zheng Xin Li, Deputy Secretary General of Policy Formulation, China Central Party Committee; Zhang Qi, State Council Golden Card National Leader, Chairperson of the Chamber of China Information Industry and Secretary General of the Department of Information Product, MII.

Madam Zhang Qi’s Keynote Address to a distinguished Forum audience of 700+ participants from global RFID industry, PRC government, and international & domestic companies representing various industry sectors at the 3rd Global RFID China Forum.

Fast Facts: Supported by: 3 MinistriesMembership of: 30 Global Industry Enterprises

500 Domestic Industry Enterprises

History of Sparkice Group and SparkiceLab Inc.

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Sparkice FoundedChina’s FirstInternet Cafe

Sparkice LaunchesB2B Platform

Sparkice BeginsRFID Initiative

Sparkice LabSpun-Off

Sparkice LabRFID Product JV

Project Execution

UIDJapan

iP-X

Sparkice Lab Partners Targeted Vertical Market

Sparkice Product Solutions for Vertical

Markets

SparkiceLab: China’s “Market Driven” RFID Technology Provider

AirportAutomotiveAnti-CounterfeitLive StockSupply Chain LogisticsTransportationRetailBankingPharmaceuticalGovernment

Master Data Sync Network

AirporteXpressAutoeXpressACeXpress

LiveStockeXpress SupplyeXpressTransporteXpress

PayeXpressPharmaeXpress

GoveXpress

Wal-Mart and Metro RFID Visibility Mandates driving suppliers to comply in US, however, in China supplier margins and lack of IT and infrastructure create requirement for a Visibility Service Provider to have shared infrastructure and lower costs.

Sparkice solves this problem

China Hub for Supply Chain & Logistics Visibility

Shared Infrastructure for China

SupplyeXpressOffers First Mile Visibility

SupplyeXpress

• is an RFID logistics solution which enables suppliers with single or diversified manufacturing operations to increase supply chain efficiency while complying with international retailer mandates.

SupplyeXpress

• is easy to install, requires no IT involvement from the customer side and results in tangible benefits, for example, highly accurate up-to-the-minute inventory information and enhanced supply chain visibility.

Logistics

Container

LogisticsLogistics

Consumer “CRM”

Retailer

Domestic CourierUPS, DHL, FedEx,USPS, etc…

“First Mile” DisconnectSupplier Network & Demand Networks

Manufacturer Distribution Center

First Mile Last MileMid-Stream (Supply Chain)

Corporate Headquarters,Buyer’s Offices

• Un-Dependable

• Un-Predictable

• Un-Secured

• Un-Clear

SupplyeXpress…Connects Supplier Network to Demand

Network

Internet Based Global “On-Demand”

Master Data Synchronization Network

LogisticsLogistics

Container

Mobile(Short Message Service)

Domestic CourierUPS, DHL, FedEx,USPS, etc…

SupplyeXpress

First Mile Last Mile

Manufacturer Consumer “CRM”

RetailerDistribution Center

Mid-Stream (Supply Chain)

Corporate Headquarters,Buyer’s Offices

DependablePredictableSecuredVisible

SupplyeXpress = Visibility

Suppliers

Suppliers

ChineseSupplierNetwork

DistributionCenter

Retailer

International

SupplierNetwork

DistributedVisibility

Service-Oriented

SupplyeXpress

Trusted, SecureReader Network

Suppliers

Consumer

Raw Materials Supplier

Delivering End-to-End Supply Chain Visibility and Intelligence

Sparkice Products &R1 Solutions

In the Supplier Network

Sparkice Products &R1 Solutions

In the Supplier Network

Sparkice Products &R1 Solutions

In the Demand Network

Sparkice Products &R1 Solutions

In the Demand Network

Source: Adapted from Forrester Research

WEB ServicesTrack and

Trace, Anti-Counterfeit

Supply Chain Monitoring and

Event Management

Services

National Product Coding,

Verification and Synchronisation

SparkiceLab Powered ApplicationsSparkiceLab Powered Applications

Full Technology Solution Stack SparkiceLab Complete Solution

CHINA ALLIANCE & STEERING COMMITTEE 射频识别（电子标签）中国联盟

R1 Alliance Member Relationships

GovernmentSupport &

Sponsorship

RFID Demo Center, China’s ‘Future Club’

Experience Full RFID Benefits.

Maximizing ROI

Supporting Members(Logistics & Container)

End User Members

(Distribution Center)Supporting Members

(Tag, Reader & Writer, Data & Content providers)

R1 AllianceRFID China Solution

and Demo Center

Suppliers & Manufacturers

FIXED LAB FIXED LAB (First-phase initiative)

August 2006August 2006: Testing, Set-up & Integration of Demo : Testing, Set-up & Integration of Demo Center; Mock-up of RFID Work Station for Wal-MartCenter; Mock-up of RFID Work Station for Wal-Mart

September 2006September 2006: : Grand OpeningGrand Opening

MOBILE LAB MOBILE LAB (Second-phase initiative)

Develop & Integrate Design SchematicDevelop & Integrate Design Schematic Rollout Mobile Lab (semi/tractor-trailer) across China’s Rollout Mobile Lab (semi/tractor-trailer) across China’s

industrial and logistics hubs for supplier RFID connectivity & industrial and logistics hubs for supplier RFID connectivity & enablementenablement

CHINA ALLIANCE & STEERING COMMITTEE 射频识别（电子标签）中国联盟

China’s RFID Demo Center1st China Government Approved & Endorsed RFID Center

RFID Demo Center, China’s ‘Future Club’

RFID IN ACTION May 30th-June 1st, 2006China World Trade Center, Beijing

Websites: www.sparkice.com; www.rfidchina.org

Participation: - 5 Ministries, 50 Global & 500 Domestic Chinese Enterprises

- Landmark RFID Event for Global & Domestic Industry, leading China government decision-makers. 4th in the series, 3rd year running.

Forum focus: latest industry trends, cases and applications of RFID technologies in animal, food safety & security systems, airport, transportation and logistics sectors, among others.

Supported by:

- Ministry of Information Industry

- National Development & Reform Commission

- State Leading Group-Golden Card Project

- China National Center for IC cards

- China Semiconductor Industry Association

Organized by:

- China Information Industry Chamber of

Commerce

- Center for Information Industry Development

- CCPIT Commercial Sub-council

- RFID China Forum

In conclusion,

Collaborate…Leverage our Strengths…

Together Become Co-Drivers of RFID…

SparkiceLab & R1-Alliance Ecosystem Realizing “First Mile” Supply Chain Visibility

“ Many Partners, One Solution ”

Thank you