barcode and rfid - market update & 2011 outlook

AutoID & Transaction Automation PracticeTom Wimmer, DirectorDrew Nathanson, Director

VDC Research WebcastRFID & Barcode: Market Update & 2011 Outlook

Frequently Asked Questions

These slides are from a webcast presented on 11/17/2010.

A full audio recording is available at:

http://vdcresearch.com/Landing/2011RFID_BARwebcast.aspx

1 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice

http://vdcresearch.com/Landing/2011RFID_BARwebcast.aspx�

VDC Research

Copy of webcast and complimentary insights and data on the RFID & Barcode market available at:

http://vdcresearch.com/market_research/autoid/research_reports.aspx


http://vdcresearch.com/market_research/autoid/research_reports.aspx�

Agenda

• Market Overview & Outlook How did the markets perform? What were the reasons behind the strong growth? Which segments of the AIDC market experienced this growth? Will growth in 2011 be at the same level as in 2010? Which market segments will provide the strongest near-term growth opportunities?

• Barcode & RFID Convergence Why are these solutions converging? Where is this convergence happening?

• VDC’s 2011 Market Intelligence Planning Services Extended vertical market and application coverage Expanded coverage of software and service markets Enhanced ability to support highly granular market intelligence requests


More Information, More Sharing … More AIDC

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Global Demand for AIDCSolutions by Technology

(Billions of Dollars)

• Barcode is the dominant track and trace technology on the planet. It is used globally throughout most industries and is the de facto standard for most companies, regardless of Tier or location.

• RFID is an emerging successor in some applications, a valuable complement in most. It is an emerging solution, capable of extending the value proposition of barcode by providing: Additional functionality More opportunities to capture information Non-line of sight capabilities

• Although they could be perceived as direct competitors, end users continue to require both solutions. The two technologies, working together, are capable of supporting existing requirements while providing the end user with additional benefits such as: Ability to support either technology/redundancy Enhance/add functionality (i.e.: sensors, memory) with limited

invasiveness Creates a migration path to a more advanced solutions

Barcode and RFID: Different data carriers supporting common requirements


Barcode Demand Truly Global – Including Emerging

00.20.40.60.811.21.41.61.82

Global Demand for Barcode Solutions by Region

2009: $9.7 Billion

• Growth will be bolstered by increased demand in emerging country markets throughout APAC, Eastern Europe, and Latin America as manufacturing continues to shift. This shift will create a ripple effect in the transportation sector as infrastructure is deployed to support this migration.

• Suppliers recognize these shifts in regional demand and are investing accordingly, establishing relationships with Original Design Manufacturers and distribution channel partners within these theaters of operation.

• Leading suppliers are investing heavily in sales and marketing activities within the APAC region as these countries strive to compete in global markets. Concentrations of these activities can be seen in China, India and Malaysia.

A gradual shift in regional demand is forcing suppliers to re-think their geographic expansion strategies


Business Improvements Outweigh Compliance

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Global Demand for Barcode Solutions by Product Type

2009: $9.7 Billion

• Enterprises who initially invested in barcoding to meet customer, industry and regulatory requirements are increasingly using the technology to improve their own processes and reduce operating expenses.

• This migration from compliance-centric applications to core process applications is driving increased investment consideration for all barcode products, and imaging and mobile printing in particular.

• Why imaging? Matrix codes are seen as a low cost alternative to RFID

for many track and trace applications. ID cards marked with 2D symbologies are enabling new,

scalable applications, particularly in retail and government. Emerging mandates and standards (i.e.: DoD’s UID

mandate) are driving demand for scanners capable of reading 2D symbologies marked directly on products and components.

Image capture at the point of manufacture allows detection of imperfections and abnormalities, reducing reverse-logistics costs.

• Why mobile printing? Within the “four walls” enterprises are taking advantage of

their wireless infrastructure to print on-demand at the point of application, reducing errors and saving time.

Off premise, enterprises are receiving the same benefits from their mobile printer investments.

Mobility and imaging driving growth in emerging applications


Powerful Application Clusters Drive Growth

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Global Demand for RFIDSolutions by Region

2009: $3.6 Billion

• Adoption within EMEA remains strong across a diversity of applications; however, the region is expected to lag the other regions: Macroeconomic conditions creating unfavorable

capital investment environment. Market maturity levels and lower concentrations

of early adopters in several emerging markets. Application and corresponding product mix variations

in pricing and phase of adoption.

• Growth in the Americas region to be driven largely by supply chain and inventory management applications (i.e.: Retail, CPG, Government), as well as a burgeoning asset tracking, smartcard and ticketing market.

• Much of the demand from the APAC region will continue to arise from smartcard and ticketing; however, as RFID moves further down the value chain, supply chain applications and source tagging will provide significant growth for the region as a result of the high level of manufacturing.

Applications scaling, adoption continues to broaden


Increased Complexity to Boost Demand for Services

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Global Demand for RFIDSolutions by Product Type

2009: $3.6 Billion

• Although significant price erosion is noted for all technologies, the passive transponder market is rapidly moving toward a consumables-based model –recurring high volume demand with increased price sensitivity and competition (and lower brand loyalty).

• Reader adoption remains strong for both stationary and mobile devices as infrastructure continues to be deployed to support new and scaling installations. Growth of OEM modules continues to be linked to integration with other devices and infrastructure.

• Demand for services to increase sharply as established accounts expand and integrate solutions and new account design and deploy infrastructure

• Software is becoming more critical to a successful implementation as the hardware markets become more commoditized and RFID integration deepens. Not only is software critical to a company’s ability to leverage the business intelligence gathered by the system, its also a cornerstone component for the addition of functionality and convergence.

Increased hardware commoditization; Software suppliers becoming gatekeepers


Facilitated & Broader Adoption

Understanding

Awareness

Facilitated & Broader Adoption

Innovators Early Adopters

Early Majority Late Majority Laggards

Awareness

Understanding

Barcode, Meet Your New Partner RFIDConvergence driven by need to leverage both solutions for enhanced visibility, decision making and operations

CommittmentCommittment

Bar

code

201

0

RFI

D 2

010

One solution is the proverbial standard, the other offers the same and more, but in order to get the ‘more’, the two have to work together as the same.

Technology Adoption Curve


Supporting A Diversity of Applications Across Markets

0

4

8

12

Industrial/Manufacturing Transportation/Logistics Retail Healthcare Commercial Services Government

Barcode & RFID Hardware Opportunity(Aggregate Revenues from 2010-2014)

RFID BAR

Pricing differentials and new applications driving larger RFID contribution in many markets


(Billi

ons

of D

olla

rs)

Convergence: Where RFID Meets the Bar

• As part of VDC’s 2010 RFID & Barcode Business Planning Services, VDC surveyed end-user communities on AIDC convergence of both technologies. This survey was given to key decision-makers, influencers and users in enterprises currently using and converging AIDC solutions.

• Regardless of the technology, every AIDC system has common components: Well-defined symbols or data carriers Devices for reading /writing information An interface between the read /write device and a host

• Gathering and sharing information within this architecture is possible if there is a single platform that ensures consistency, acting as a unifying concept which makes certain that the information being used is essentially the same.

• So, although technologies continue to be integrated with each other, the real convergence is occurring at the data level. Fundamentally, it’s the same data for each solution – it’s just being carried differently.

Barcode and RFID convergence is happening from the Point of Manufacture through the Point of Sale


CONVERGING AIDC SOLUTIONS

AID

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LUTI

ON

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USE

D

Bar

code

RFI

D

NFC

Sens

ing

DAQ

Mag

Strip

e

M2M

OC

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Bio

met

rics

Barcode 34% 1% 7% 0% 22% 22% 8% 5%

RFID 60% 5% 14% 1% 1% 17% 2% 1%

Near-Field Communications

21% 11% 4% 0% 14% 46% 4% 0%

Sensing/monitoring 0% 63% 0% 27% 0% 7% 0% 3%

DAQ Terminals/Modules

0% 5% 0% 59% 0% 27% 9% 0%

Magnetic Stripe 97% 0% 0% 0% 0% 0% 0% 3%

M2M 12% 28% 11% 15% 19% 0% 6% 9%

Optical Character Recognition (OCR)

7% 13% 7% 0% 33% 0% 40% 0%

Biometrics 11% 28% 11% 33% 0% 0% 17% 0%

VDC’s 2011 Market Intelligence Planning Services

Barcode We are now offering an entire track devoted to the barcode end-user. This track focuses on technical and commercial

customer requirements for barcode scanners, printers, and consumables for all regions, including how trends within these requirements will impact deployment for these technologies.

We have also created an entire track dedicated to vertical market analyses. This track will provide an overview of market definitions, estimates and forecasts, and end user requirements and preferences for major barcode vertical markets. It will also focus on critical issues facing enterprises deploying barcode solutions – what current users have experienced, what potential users are thinking, and how these perspectives are shaping demand for 2011 through 2015.

Availability of custom analyses, including segmentations of products by applications in verticals within economic sectors within regions.

RFID Instead of offering a roll-up, we are now offering an entire track on vertical and application analyses. These tracks will

provide:• An overview of market definitions, segmentations, estimates and forecasts, and end user requirements and preferences for major RFID

vertical and application markets. • An analysis of critical issues facing enterprises deploying RFID solutions – what current users have experienced, what potential users are

thinking, and how these perspectives are shaping demand for 2011 through 2015.

We are now offering a comprehensive analysis on the distribution channels for RFID products. This analysis will focus on technical and commercial channel requirements for all RFID solutions under study, including how trends within these requirements will impact distribution for these technologies.

Availability of custom analyses, including segmentations of products by applications in verticals by frequency within regions.

What’s new in 2011?


2011 Deliverables & Schedules: Barcode

RESEARCH SCHEDULE & DELIVERABLESTRACK I: Supply-Side AnalysesVolume 1: Handheld Scanners April 2011Volume 2: Stationary Scanners April 2011Volume 3: Barcode Printers April 2011Volume 4: Barcode Printer Consumables May 2011TRACK II: Demand-Side AnalysesVolume 1: Americas June 2011Volume 2: EMEA June 2011Volume 3: APAC June 2011Volume 4: Global June 2011TRACK III: Vertical Market AnalysesVolume 1: Industrial/Manufacturing August 2011Volume 2: Transportation/Logistics August 2011Volume 3: Government August 2011Volume 4: Retail In-Store August 2011Volume 5: Health Care Services August 2011Volume 6: Commercial Services August 2011TRACK IV: Distribution Channel AnalysisVolume 1: Global Distribution Channel Analysis September 2011

Vendor Profiles Delivered as part of the Supply-Side Analyses

Study Publication Date Historical Base Year Estimate Forecast Period

Service Year 2011 2010 2011 2012-2015


2011 Deliverables & Schedules: RFID

RESEARCH SCHEDULE & DELIVERABLESTRACK I: Technical AnalysesVolume 1: Transponders, ICs & Inlays April 2011Volume 2: Readers & Interrogators May 2011Volume 3: Printers/Encoders & Applicators May 2011Volume 4: EPC UHF Solutions June 2011Volume 5: Contactless Smartcard Solutions June 2011TRACK II: Vertical Market AnalysesVolume 1: Retail July 2011Volume 2: CPG July 2011Volume 3: Transportation/Distribution July 2011Volume 4: Pharmaceuticals August 2011Volume 5: Health Care August 2011Volume 6: Government August 2011TRACK III: Application AnalysesVolume 1: Asset Tracking September 2011Volume 2: Supply Chain Management September 2011Volume 3: Security/Access Control September 2011TRACK IV: Distribution Channel AnalysisVolume 1: Global Distribution Channel Analysis October 2011

Vendor Profiles Delivered as part of the Supply-Side Analyses

Study Publication Date Historical Base Year Estimate Forecast Period

Service Year 2011 2010 2011 2012-2015


Q&A Session

Thank You for Attending this VDC Webinar

For more information about VDC Research coverage on the global markets for Barcode & RFID Technologies please contact:

Tom WimmerDirector, Auto ID & Transaction Automation [email protected] | 630.279.7959

Drew NathansonDirector, Research [email protected] | 508.653.9000 x148

Janice SeidmanAccount [email protected] | 508.653.9000 x139


mailto:[email protected]�

