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Jan 27, 2016

RFID Companies Should Stand United to Defend the RFID ETSI Frequencies – We Are Not Out of the Woods Yet

Listen up now Alien, Avery Dennison, GE, Honeywell, Intel, Impinj, NXP, Metro, Smartrac, SML, SATO, Tesco, and Zebra. You have a world of hurt coming in – the ETSI UHF RFID band might get cannibalized, and you cannot afford it. We are facing a serious situation where other technologies may cripple the already narrow RFID ETSI band. Read on to learn more about what you should do to defend your business.

AIM and RAIN are alert already, but more industry collaboration is needed to defend the ETSI RFID frequency band from other interested parties

RFID Is a Niche Technology Compared with WiFi

WiFi, NFC, and Bluetooth are all great technologies, with trustworthy standards and powerful industry alliances behind them. UHF RFID is a hobby in comparison. How many people on the planet have ever heard about RFID, or of the RAIN Alliance for that matter?

European RFID companies and potential end-users already lost one fight a long time ago. Just compare the ETSI 865 to 868 MHz band to the FCC 902-928 MHz ISM band. Some difference there – how many channels was that? Luckily we Europeans got away with 2 Watts ERP anyhow.

WiFi Stretching Down to Sub-gigahertz Area

Next up: the ETSI RFID band may be crippled by other technologies, at least if we ask the WiFi consortium. The WiFi consortium with its 600 member companies is completing its mission, doing the dance and WiFi HaLow is being lobbied for a sub-gigahertz band to operate in, potentially on top of ETSI RFID. To make the situation even more alarming, RFID companies are not presented well enough in the ETSI workgroups where the hard work is done. This is where industry collaboration would make a difference.

LBT Would Downgrade the Position of RFID

A simple resolution of sharing the band is to put Listen Before Talk (LBT) in place and use RFID only if there is an available channel. Well then, how would that modified sales pitch is going to sound like to your customers who are concerned about the RF reliability and availability? Do note there are only four ETSI RFID reader channels available!

“Yes, well, basically, there is no problem.”

In the worst case, the IoT of non-powered devices would be postponed in Europe by a few decades. All the previous pain related to Round Rock and the Japan 950 MHz band change are peanuts compared with this. The EU business covers a 30% share of the global RFID market – this would hurt us all bad. We may all be destined to walk the niche path unless we act and stand united.

RFID companies and associations cannot afford to bury their head in the sand when it comes to standardization

The New 915-921 MHz Band Is Needed and Proposed, but Not Approved Yet

The good news is that the new band 915-921 MHz in Europe may be opening up for RFID in the future. The proposal was already made in 2012 ETSI TR 102 649-2 V1.3.1 with an update ETSI EN 302 208-2 V2.1.1 in 2015. This is absolutely a positive issue with the work item REN/ERM-TG34-264 now in the “Final Draft for Approval” phase. How are You currently supporting this noble mission?

Get Proactive in Defending Your Business

AIM is alert already, and we have smart people engaged in this work. Still, more support is needed: join ETSI, join RAIN Alliance, support AIM, support GS1, and do assign your brightest to work on the ETSI ERM TG34. We are not out of the woods yet. Spare no Dollar, Euro, Yen, nor Yuan – Sharing the 866 MHz RFID band is not a concern of Europe alone; it could impact the global RFID business severely!

Do also make sure your representative is in the right room when it’s time to vote.

Oct 22, 2015

Avoiding the Next RFID Hype Rounds by Learning from the Past

Omni-channel retail, pharma serialization, internet of things, M2M, NFC – the world never runs out of buzz words that get us all worked up and excited. Then come to the budgeting rounds, and so many again overestimate the next year’s revenue growth, setting the sails towards the future disappointment. What is so tricky about it – how to see the forest from the trees?

I would keep my nose directed forward but also take care to learn from the past. Read on to grasp some of the past mistakes.

As we look back at the strange days of the tremendous RFID hype in 2004-2007, one can only shrug and shiver. Can you remember the factors that drove up the inflated expectations curve ten years ago? I was a rookie in the RFID business in 2004 and couldn’t tell which were major and minor industry drivers. Now the following themes become highlighted as I try to make sense of the past.

Royalty-free ISO Standard Makes Your Day

In 2004, the Class 1 Gen2 was ratified by EPCglobal. As no patent constraints had been found, the EPC Gen2 standard was also declared royalty-free by EPCglobal. The significance of Gen2 was manifested in 2006 as the International Standards Organization ISO approved it as a part of the 18000-6 standard. Class 1 Gen2 fixed many shortcomings of the original Class 1 and 18000-6B standards, and this global standard certainly paved the way for a smoother ride for the industry.

Do NOT use this switch!

Wal-Mart flipped the hype boost to overdrive with its announcements in early 2004 for the top 100 suppliers to tag pallets and cases by January 2005. This drove the whole RFID industry, and those around it, practically insane. If Wal-Mart was doing this, wouldn’t this drag the other retailers to do the same? Also, venture capitalists woke up and became fully alarmed not to miss the train. Money started pouring in RFID companies that were set to make millions in the Wal-Mart ecosystem alone, had short or non-existent revenue history, a few patents perhaps, and a bullish burn rate. It was a roller-coaster ride during which marketing agencies, lawyers, and event organizers must have made big dollars.

Go Only with a Solid Standard

By 2007 nothing much had happened. One central cause for Wal-Mart not getting ROI in their RFID expedition was the timing related to standards – the transition from Class 1 to Class 1 Gen2 took a long time and effort for the technology vendors, which also had other worries to handle. As Wal-Mart gradually began to pull back on RFID and Nasdaq started to slide, it was clear that most RFID companies were firmly headed towards the biggest hangover of all times. RFID hype had peaked, and burst, too.

Healthy Competition, or Something Lurking Behind the Scenes

One thing the investor money managed to get done was to destroy the profit margins in UHF RFID. Even the few good looking companies in RFID were nearly pushed over the edge by their revenue-hungry-investor-backed competitors that sold their goods probably at a below-zero profit. As technology was still immature and quality standards non-existent, the door was open for low-quality and no-quality vendors that gradually ate off the left-over positive karma around RFID. End users learned to be cautious and consider quality aspects as well, which now at the later time has turned into a competitive advantage for companies that have quality processes well established.

2008 to 2010 were terrible times for everyone. I can imagine how so many sales funnels had steadily forward surfing high-rise edges. As the pressure eased off just slightly, then came December of 2011 and Round Rock. That horrid battle took long and was mostly fought behind the scenes. I feel lucky for not knowing all the details, but the dispute did plenty of harm! Among other casualties, the Impinj IPO was scrapped in 2012, but at the same time, Smartrac was awake and managed to execute some significant acquisitions. The one universal splendid outcome from Round Rock was the fact that RFID companies learned to co-operate in the name of a greater common good.

Less Hype, More Industry Collaboration

There may be a time to go solo – but not now

We arrive at the present day – RFID hype is long gone, technology has matured, and studies clearly show how the RFID adoption is streamlining processes, bringing ROI and making the world a better place. Omni-channel retail, lean manufacturing, passive sensors, and expanding industry collaboration, such as the RAIN Alliance and GS1, are some of the drivers that bring more and more business to the technology vendors and solution providers.

The future of the RFID market looks set to continue at double digits rate growth. I do not see any unjustified hype on the horizon as of now. If only the RFID industry would be able to avoid the next pitfalls, such as new patent disputes, proprietary national protocols, and especially the IoT hype. In general, I feel optimistic over all this; however, having been an entrepreneur for over ten years, I won’t be surprised.

Do let me know if your crystal ball reflects the future any differently, and with more clarity! Send me an email (juho.partanen@voyantic.com) and let’s talk more!