Barcode and RFID – Market Update & 2010 Outlook

Barcode & RFID
Market Update & 2010 Outlook
Tom Wimmer
Director, Auto ID & Transaction Automation Practice
Drew Nathanson
Director, Research Operations

Recording Available

These slides are from a webcast presented on 01/20/10.

A full audio recording is available for download at:

http://www.vdcresearch.com/market_research/
autoid/freeresearch.aspx#
t id/f h #

VDC Research

Complimentary insights & marketing data on barcode and RFID markets
is available at:

www.vdcresearch.com

2 –  2010 VDC Research Group, Inc.
AutoID & Transaction Automation Practice

Today’s Speakers

• Tom Wimmer
 Tom manages VDC’s AIDC and Transaction Automation Practice, which follows advancements in
barcode, RFID and retail automation.
 Prior to VDC, Tom spent 11 years managing the market research function at Zebra Technologies, a
leading provider of barcode printing, card printing and RFID solutions.

• Drew Nathanson
 Drew Nathanson directs research operations for VDC, interacting daily with Practice Directors and
analysts from each of VDC’s practices: Embedded Hardware, Embedded Software, Industrial
Automation and Control, Mobile and Wireless, and AIDC and Transaction Automation.
, ,
 Prior to VDC, Drew worked for a number of companies helping to commercialize several emerging
technologies


Agenda for Today’s Presentation

• 2009 year in review
 What were the underlying causes of the market contraction?
 Which segments of the AIDC market were most impacted?
 What tactics did suppliers take to insulate themselves?

• 2010: VDC’s expectations
 What are the macro economic trends that will impact future investments in barcode and RFID
technologies?
 Which market segments will provide the strongest near-term growth opportunities?
near term
 Where will barcode and RFID technologies most likely converge, presenting opportunities for cross
selling and increased collaboration among suppliers and their distribution partners?

• VDC’s 2010 Market Intelligence Planning Services
 Coverage focus shifting from products to the solutions they enable


2009 Year in Review

• The global recession adversely impacted nearly all suppliers of AIDC technology.
• RFID was more insulated than barcode, but both segments saw material contraction.
• Time honored sales and support models are no longer resonating:
 The global recession is forcing suppliers to innovate beyond the technologies they develop and
support

• Deploying customers are increasingly looking to their technology suppliers to put skin in
the game by:
 Quantifying and guaranteeing the benefits of deployment
 Assuming project management accountability
 Insulating against obsolescence
 Developing financing models that reduce opportunity costs and free up capital to address competing
IT initiatives


2009 Year in Review: Barcode
Recession caused a significant contraction of core b
R i d i ifi t t ti f barcode h d
d hardware

Yr/Yr Growth: Core Barcode Hardware

15.0%
10.0%
5.0%
0.0%
5 0%
-5.0% 2008 2009 2010 2011 2012 2013
-10.0%
-15.0%
-20.0%
-25.0%
2008 2009 2010 2011 2012 2013

Handheld Scanners Stationary Scanners Barcode Printers TOTAL


2009 Year in Review: RFID
Growth slowed b t rapid return t hi t i l growth expected
G th l d but id t to historical th t d

Yr/Yr Growth: Core RFID Hardware

25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0% 2008 2009 2010 2011 2012 2013
-10.0%
-10 0%
2008 2009 2010 2011 2012 2013

Transponders Readers Printer/Encoders Total


What were the underlying causes of contraction?
Global R
Gl b l Recession I
i Impacts Core AIDC S
t C Segments H d t
t Hardest

• The global recession brought contraction in demand, production and employment, which in-
turn created increased supply chain capacity and decreased supply chain velocity.

• Reductions in capacity and velocity softened the automation imperative in core supply chain
segments: manufacturing, T&L and retail.

• Enterprises delayed deployment of planned large scale projects, placing increased
emphasis on cost reduction by lengthening refresh cycles and supporting installed
solutions.


Which product segments of the AIDC market were
most impacted by the recession?
p y

• Most Impacted: Barcode • Most Impacted: RFID
 Laser scanners  Readers
• Handheld  Printer/Encoders
• Stationary  EPC UHF Hardware
 Stationary barcode label printers • Least Impacted RFID
• Least Impacted: Barcode  Middleware/Edgeware
 Imagers  Installation/Integration Services
 Scan engines
 Mobile transaction printers
 Consumables


What tactics did suppliers take to insulate
themselves from the recession?

• To begin with, none did. Virtually every supplier of AIDC and RFID equipment suffered in
2009. With rare exception.

• However, there are a number of survival strategies and tactics that enabled some to fare
better than others.

• Three of the most common included:
 Care and feeding of the installed base
 Bundling complementary solution components
 Aggressive focus on channel management, retention and support
management

• One of the most successful and oft overlooked:
 Deployment of new business models aimed at mitigating risk while maximizing value


Key Questions for 2010

• What are the macro economic trends that will impact future investments in barcode and
RFID technologies?

• Which market segments will provide the strongest near-term growth opportunities?
• Where will barcode and RFID technologies most likely converge, presenting opportunities
for cross selling and increased collaboration among suppliers and their distribution
partners?

• What sales and deployment models present serious investment consideration in the coming
12-24 months?


What are the macro economic trends that will
impact future investments in barcode and RFID?
p

• Increased Global Demand and Manufacturing
 Further development of standards and solutions capable of supporting global value chains and
breaking down region adoption barriers
 Requires deeper integration (Enterprise, Value Chains)
 Facilitate global expansion into core and emerging markets

• More Scrutiny and Management of Investments
 Necessitates Reliable and Reproducible Business Models
 Pushes back onto the supply community to mitigate risk meet current and future requirements
risk, requirements,
improve customer relationships, and innovate

• Enhanced Security
 Increased emphasis on secure value chains, pedigrees, and chain-of-custody
 More development of gathering, securing, sharing, routing, and leveraging of business intelligence

• Increased Mobility
 Broader deployment, emphasis on convergence with a wider range of enterprise and mission critical
systems – and consumers


Which market segments will provide the strongest near-
term growth opportunities?
g pp

Vertical M k t
V ti l Markets Applications
A li ti

Health Care Patient Safety
Commercial Services Asset and People Tracking
Barcode

Government Field Sales/Service
Specialty Retail Self-Service & Customer Interaction Management

Commercial Services Supply Chain Management
Electronics Asset & People Tracking
Government Ticketing
RFID

Health Care Contactless Payment
Manufacturing Sensing/Monitoring
Pharmaceuticals ID/Access Control/Security
Retail


Where are the centers of convergence for barcode
and RFID?

• Products
 Readers and Scanners
 Printers and Encoders
 Tickets, tags, labels, other consumables
 Open platform middleware/edgeware

• Applications
 Supply Chain Management and Track/Trace
 Asset Management
 Security and Anti-counterfeiting
 Access Control and ID
 Ticketing
 MRO (Maintenance, Repair, Overhaul)
 WIP and Sample Tracking
 LBS (Location Based Services)
 POS and Customer Loyalty


What sales and deployment models should be
evaluated/considered in the coming 12-24 months?
g

• Deploying enterprises are looking for suppliers willing to assume increased accountability
for those solutions they sell and support.

• This requirement is being addressed by forward thinking suppliers through:
 Managed Service Offerings (hosted models)
• Higher performance and lower liability
• Opportunity cost reduction or elimination
 Easily customizable ROI frameworks and sales tools
 The Deployment of Project Management Offices to support key accounts and high growth segments


VDC’s 2010 Market Intelligence Planning Services

• Feedback from clients regarding 2009 services:
 More information on the solutions and associated operational requirements
 More granularity, specificity, and insight
 Receipt of business intelligence earlier and more promptly

• How VDC is addressing these requests
 Increased coverage of solutions supported by core products and technologies covered
 More context and commentary on market trends, applications, end user requirements & preferences,
use environments, supplier strategies … provided in a higher value add and less complex format
environments
 Improved data collection process, databases, models, and tools to enable deeper, more granular
analyses and support of custom requirements
 More focused scope of work with an accelerated research schedule as a means ensure delivery of
most product in 1H 2010
p


2010 Schedule and Core Deliverables: Barcode

RESEARCH SCHEDULE AND DELIVERABLES
Volume 1: Handheld Scanners, Offering Segment Analysis May 2010
Volume 2: Stationary Scanners, Offering Segment Analysis May 2010
Volume 3: Barcode Printers, Offering Segment Analysis June 2010
Volume 4: Barcode Printer Consumables, Offering Segment Analysis
, g g y June 2010
Volume 5: Customer Requirements Analysis (across all product types) July 2010

Vendor Profiles Delivered as part of the Offering Segment Analysis
Distribution Analysis Delivered as part of the Offering Segment Analysis

Study Publication Date Actual Market Size/Supplier Share Forecast Market Size

Service Year 2010 2009 2010-2014

Monthly status reports Begin March 2010

Interim findings: 1 month prior to publication of each Offering Segment Analysis volume


2010 Research Campaign Plan: Barcode

Methodology Target Communities
Approximate Sample Size

Handheld Barcode Scanner Suppliers 15

Stationary Barcode Scanner Suppliers 10

Phone Interviews
Ph I t i Barcode P i t S
B d Printer Suppliers
li 20

Barcode Printer Consumables Suppliers 20

Distributors, resellers, VAR /SI
Di t ib t ll VARs/SIs 25

Web-based Interviews End users, distributors, resellers, VARs/SIs Target N > 500


2010 Schedule and Core Deliverables: RFID

RESEARCH SCHEDULE AND DELIVERABLES
Volume 1: RFID Transponders, Transponder ICs, and Inlays, Supply-Side Analysis May 2010
Volume 2: RFID Readers, Supply-Side Analysis May 2010
Volume 3: RFID Printers/Encoders, Supply-Side Analysis June 2010
Volume 4: RFID Middleware/Edgeware, Supply-Side Analysis June 2010
Volume 5: RFID Professional Services Supply Side Analysis
Services, Supply-Side July 2010
Volume 6: Contactless Smartcards and RFID Ticketing Systems, Supply-Side Analysis July 2010
Volume 7: RFID Vertical Markets, Data Book August 2010
Volume 8: RFID Applications, Data Book August 2010
Volume 9: RFID Market Drivers and Customer Requirements, End-User Analysis September 2010

Vendor Profiles Delivered as part of the Supply-Side Analysis

Study Publication Date Actual Market Size/Supplier Share
Forecast Market Size

Service Year 2010 2009 2010-2014

Monthly status reports Begin March 2010
Interim findings by volume 1 month prior to publication of each supply-side volume


2010 Research Campaign Plan: RFID

Methodology
Target Communities
Approximate Sample Size

RFID Hardware and Systems Suppliers 50

RFID Transponder and Reader IC Suppliers 10

Phone Interviews RFID Middleware Suppliers 15

RFID Professional Service Providers 15

Contactless Smartcard System Suppliers 10

Web-based Interviews Enterprise end users and evaluators Target sample N~500


Founding Sponsor Benefits and Schedule

• Service Schedule:
 Founding Sponsor enrollment: through January 31, 2010
 Deliverables begin with Q1 Bulletin, with major reports: April through September 2010
 Planning discussions with early subscribers: through February 2010
 Monthly status reports: begin March 2010
 Interim findings by volume one month prior to publication of each final report volume

• Founding sponsors receive the following benefits:
 Opportunity to provide input on the study architecture, scope, direction
 Monthly updates and real-time qualitative findings of interest at each major milestone throughout the
execution phase of the study
 Discounts from standard post-publication prices
 Executive presentation that walks your team through the research sponsored


Q&A Session

Thank You for Attending this VDC Webinar

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

Tom Wimmer
Director, Auto ID and Transaction Automation Technologies Practice
twimmer@vdcresearch.com | 630-279-7959

Drew Nathanson
Director, Research Operations
andrewn@vdcresearch.com | 508-653-9000 ext. 148

Peter Doran
Account Executive
pdoran@vdcresearch.com | 508-653-9000 ext.139


Barcode and RFID – Market Update & 2010 Outlook

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