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- April 13, 2006 -


RFID News: Wal-Mart, Albertson’s, Sign RFID Reader Deals, Bear Sterns Reports



15,000 readers for Wal-Mart, 5000 for Albertson’s, indicate RFID rollouts continuing aggressively



SCDigest editorial staff

The News: The research group at investment company Bear Sterns reported this week that two substantial contracts for fixed RFID readers had been awarded by retailers Wal-Mart and Albertson’s.

The Impact: The deals would indicate continued aggressive roll-out plans by electronic product code (EPC) leaders Wal-Mart and Alberston’s. The reported win at Wal-Mart by Alien Technology and Impinj is interesting because neither company has agreed to participate in Intermec’s Rapid Start licensing program. With some intellectual property issues related to EPC/RFID still under dispute, some have suggested Wal-Mart may have even had an interest in driving business to a non-Intermec licensee, though Bear Sterns says it believes Alien and Impinj offered lower prices than their chief rival for the Wal-Mart business, Symbol Technologies.

The Story: Bear Sterns reported to its investment community that it believes two major contract awards had been made for fixed EPC/RFID readers. It said Wal-Mart has informed Alien and Impinj they will share in a roll-out of 15,000 readers for DCs and stores, while Albertson’s has given the business for 5000 readers to Symbol Technologies. Neither the retailers nor the vendors would confirm the reports.

With continued speculation about the pace and scope of EPC rollouts, and the news last week that Wal-Mart CIO Linda Dillman was being re-assigned and Albertson’s about to be acquired by SuperValu, the purchases if accurate would appear bullish about the EPC plans of both retailers.

Bear Sterns Phil Alling reported in a research note this week that “Industry contacts indicate that Wal-Mart has informed Alien Technology and Impinj that they have won deals to provide 15,000 fixed RFID readers to Wal-Mart as part of the company’s continued RFID rollout. Our sources suggest that the deal was done at a per reader price substantially below that of previous deals won by Symbol and ThingMagic.”

At the same time, Alling reports that Albertson’s is awarding a 5,000 fixed reader deal to Symbol, at high prices per reader than was secured by Wal-Mart (no surprise there).

On the Wal-Mart deal, neither Alien nor Impinj is a participant in Intermec’s Rapid Start licensing program. That program offers relatively soft royalty terms to use technology related to RFID patents Intermec has claimed. (See Should Intellectual Property Rights Impact Your Decision on RFID Technology Providers?)

Supply Chain Digest has spoken with industry insiders who have said Wal-Mart was not happy with Intermec’s course of action in asserting its Intellectual Property rights, as it was viewed as contrary to the “IP free” claims and spirit of the EPC Global standards, which Intermec disputed. One an executive from one RFID vendor, who asked to remain anonymous, told SCDigest, “I am sure in the end price was the dominant factor, but it’s also possible Wal-Mart wanted to make a point in support of an IP free environment.”

After some initial intense legal battles, Intermec and Symbol settled their lawsuits against each other, and Symbol joined Rapid Response.

Do you think these deals are a bullish sign for EPC/RFID rollouts? What is your perspective on the RFID intellectual property issues? Let us know your thoughts.

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