Sunday, September 19, 2004

RFID. Intermec/Matrics disagreement a problem?

through ZDnet:

Intermec has key RFID patents and its royalty program, which levies 5 percent to 7.5 percent fees on various RFID hardware components, illustrates a difficult balancing act for RFID patent holders--something Intermec's own Miller calls a "conundrum." One the one hand, patent holders want to profit from their development work. On the other, they don't want to sap the demand for the technology with excessive fees.

A pile-on by other patent holders could double the costs of RFID tags and related equipment, according to MIT's Engels. About 30 other companies and individuals, including Lucent Technologies and Micron Technology, hold important RFID patents, though some expire soon, he said.

Although it's a worst-case scenario, a doubling of price would be a major blow to the industry, which has been marching toward a 5 cent tag as a prerequisite for introducing more advanced RFID features, such as those to combat shoplifting and counterfeiting. Those features require the tagging of millions of individual items rather today's more common practice of placing tags on shipping cases, which requires far fewer tags. Today, tags sell for 20 cents to 45 cents each, depending on the volume of the order.

"We're seeing a downward trend in prices, and that's one of things driving adoption," said Jeff Richards, president and chief executive of R4 Global Solutions, an RFID consulting firm in San Francisco. "Anything that adds cost into the equation could impact that progress."


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