Hi Gerry,
This is one I think should be required reading. It follows
the story through with a lot of knowledge in a way that
gives an interesting slant on the picture.
Following this one through cannot help but give insight.
I believe we will see at least one good contract besides
the IP contract before the end of this year. Read also
the BTG history. They have become active partners.
Here's the article:
PYGG's RFID WORLD DOMINATION THEORY
I am only speaking with regards to how I see SAMsys becoming successful in the RFID world of the future.
Take it with a grain of salt, squeeze of lemon, and cuervo gold. A lot of it is boring history but you need to follow along because a lot of it is I trying to fill in the blanks.
We all know the downfalls of the RFID world a few years ago. It was being deployed commercially yet limited due to proprietary technology. Vehicle transponders, toll roads, etc were the most common applications. A long time ago, BTG invented a thing called the SUPERTAG which operates best at 13.56 and uses a 64 bit encryption which allows multiple functions to be written, read, etc on the tag at any one time. The problem with the tag however was the anti collision problems during high volume applications, specifically, the backscatter problem. They still patented the technology.
The purpose of patents is to protect proprietary technology. Anyone can improve on your technology but they must pay you royalties for the original idea. SMY licensed the technology from BTG. They subsequently developed an agile, multi frequency, multi protocol reader that, we are told, eliminated the backscatter problem. They filed for the patent protection themselves.
Currently, there are 40+ patents for mf/mp readers. As far as I have been able to determine, there is only one that includes specific resolution of the backscatter problem due to a “unique algorithm interrogator device.”
RFID improved visibility as we passed through 1998 and 1999 yet without standards, companies were unwilling to invest, even though they saw the benefits. Constant Beta/VHS references were implied.
TI, Philips, Gemplus were the big Tag Manufacturers. Along came Motorola however. They introduced BiStatix and the RFID world really started to buzz because the cost factor, which was always the excuse, could be forecast to drop dramatically. SuperTag was out there and made wild promises of doorway mass checkout systems. The tags cost too much though and BiStatix was the future.
Savi was predominant in the government. Why not? Go for a customer with unlimited pockets.
Electronic Article Systems became widespread through Symbol, Zebra, and Checkpoint.
TI developed SpeedyPass for Mobil.
ALL OF THESE SYSTEMS HOWEVER, WERE/ARE CLOSED GIVING FURTHER CREDENCE TO THOSE WHO SAID THE TECHNOLOGY WAS CUTE BUT NOT APPLICABLE IN LARGE SCALE SUPPLY CHAIN SYSTEMS.
If RFID was to prove itself, it had to be able to integrate the ENTIRE supply chain system, no matter what the job.
OK, we all know that. Switchgears here but I promise, we will come back. Microsoft is the dominant software company in the world. How did they do it? They gave away the software to the box makers. People started buying those PC’s with added value software programs in them. Even IBM came back to Bill and said, uh, no hard feelings and can you help us out. Apple refused. We know what happened there.
MAC users swear by their PC’s. Computer obsessed tekkies I know swear Linux is better than Windows. The problem is that there is no problem for the world. It’s the non-conforming Windows software/PC’s that have the problem. The world runs on windows. Why? It’s the language. We all know it. There are regional discrepancies, dialects, etc but the basis is the same. Digital Equipment CEO in the 1970’s (I’m sorry I’ve forgotten his name) stated, “I cannot see the need for anyone to have a computer in their home save balancing their checkbook.” They kept churning out mainframes and ignored the demographic studies, which showed people liked gadgets so long as the gadgets all worked the same way. A shovel is a shovel. A toilet is a toilet. The internal design, manufacture may be different, but the world demands a STANDARD way to use it.
WINDOWS is the standard software program of the world. If you want to sell a new game, tax program, stock platform, it better be compatible with Windows or you’re dead. People are not going to go out and make wholesale changes with the systems they use and are familiar with (creatures of habit) just because some GOVERNMENT agency or COMMITTEE tells them you can’t do it that way anymore.
Back to RFID. To recap we have SMY, which claims to have solved the problem of proprietary system obsolescence. Within the next 18 months, a flurry of activity occurs. They sign alliances, licensing agreements, agreements to share technologies with ALL of the major players except one: SAVI. At the same time, everyone else begins to share technologies. SMY is within 2 degrees of separation from any other company in the RFID world. Everyone is either collaborating or OEM for each other.
Jan 5, 2001. SMY is selected by IP to be its “reader company of choice” for their RFID strategies. YYAAAAAHHHOOOOOO! Here we go we all say. One year earlier however, Motorola and IP announce they are going to develop smart packaging. So if we are with IP, and the world knows, and IP is with Motorola, and the world knows, where’s the PR about SMY being given the BiStatix protocols? According to Gerry, we had a PR in April ready to go but couldn’t get the go ahead from MOT.
Meanwhile, TI is expanding SpeedyPass style applications and at the same time, announces a strategic relationship with Marconi and SuperTag. They also change their name from TIRIS to TAG-IT for their RFID Division. They also align with Philips MiFare technology, also based on the BTG protocol.
In May 2001, BTG announces that the next generation SuperTag, known as ECOTAG, is now commercially available. The benefit of the EcoTag is that is a 96-bit encryption, is read/write and can be programmed to coordinate anti collision protocol. BTG also announces that they have 7 companies under license to promote EcoTag and are actively seeking another…..20!. Wow. The reason for this rapid promotion is that if MIT is right, BTG estimates that the ANNUAL TAG REQUIREMENT FOR THE WORLD WILL BE AN AMOUNT EQUAL TO :
10 to the power of 14!
No one company can manufacture that quantity. Multiple tags from various vendors WILL exist. They, BTG, as does MIT, see hope for RFID lies only with an agile mf/mp reader.
Since January 2001, every major RFID company has suddenly announced an ANTI-COLLISION, BACKSCATTER REDUCTION, MF/MP READER. None has filed for a patent as far as I can tell.
Back to BiStatix. MOT suddenly dumps the whole thing. WHAT! But it’s the new and improved mousetrap. What is going on. Almost immediately, GEMPLUS restructures their own Tag business and announces strategic concentration on the smartcard business.
Rumors begin to leak out that BiStatix can’t be read if more than a couple of centimeters from the reader. The EcoTag can be read up to 9 metres away. IP decides to go with EcoTag which the SMY reader is based on anyway. MOT sees the future (I discuss later) and bails out.
IP and SMY file patent app for a SMARTSHELF.
Philips announces implementation of MiFare for Exxon, which also happens to be compatible with the SpeedyPass. Marconi supplies a “PAD” for the inside of the store.
McDonald’s begins to test TAG-IT in Chicago at 9 locations, expands it to 400 and then 2 others in New York. Oddly, they have been using SIRIT technology in California but no mention of this is in Chicago.
MIT announces a town test to take part in 3 stages. The first occurs Oct 1 2001 and involves tracking pallets of goods. The second stage will involve store inventory measurement and the third will focus on individual product tracking and POS (Point of Sale).
CHEP announces RFID deployment in Europe in Nov 2001.
THE THEORY:
TI and Marconi and Philips are pushing ahead with the EcoTag protocol to make it the “Standard” of the RETAIL world. They are following the Windows Business Model.
What is the number one retail purchase in the world? BUYING FUEL! This is the ultimate end user scenario. Every time you go to the store, you usually take your car, which means you have your keys, which means you have the wonderful easy to use gadget.
When you go to McDonalds, you drive. Thru or go in, you can wave the gadget. Aah, what if you have MiFare, not Tag-It. We don’t want to have to use umpteen gadgets. I want one cell phone. Not two for separate local and long distance. So McDonalds needs a special reader that is mf/mp but in the drive thru, this is a low volume application. Inside, there are special considerations due to tag backscatter and collision. A smarter reader may be required there.
Taco Bell, KFC, Pizza Hut, 7Eleven are all testing RFID and its TAG-IT.
Every Wal-Mart has a McDonalds in it.
Now, you are the CEO of Wal-Mart. Along comes Marconi promoting this wonderful payment system. No need for cash on hand. Reduces bank charges, thefts, employees have more time, simplifies accounting, etc. How do you implement it? You have to put this little plastic mat on your checkout stands. If they want to pay cash or credit, they still can. What about the gadgets? They already have them. Great, the readers cost 1000, heck; Wal-Mart would save that much in a day.
By the way, Wal-Mart CEO, another consideration here is to automate your supply chain. The same technology, readers you have can in the near future track items eliminating shoplifting, inventory counting, out of stock items, etc.
Explain that.
We do it all by implanting this EcoTag in the item at the start of manufacturer. The tag is agile and can be utilized in conjunction with dumb readers (for basic applications) and very smart readers for the complex ones.
Scenario.
IP receives raw material from their suppliers via pallets. One tag on the pallet, one pallet at a time, you need a simple reader. They make Tide boxes for P&G. The boxes have the ecotag imbedded in them. We know how many boxes are on a pallet. As they ship out the pallets, they only need the dumb reader. They need a smart reader during assembly however to ensure the tags are written with the basic program requirements for P&G. As the boxes pass through, the reader recognizes the tag, and writes to it. This will coordinate manufacture, shipping dates in the event of recall etc.
P&G receives the pallets. Simple reader. They fill the boxes. Smart reader again programming the tag with the manufacture data and the requirements of the vendor destination.
CHEP keeps shipping the pallets. Delivery personnel need dumb readers.
So CHEP brings in the pallet of TIDE through the shipping door of Wal-Mart. Dumb reader. Eventually, Wal-Mart moves the stock out into the store onto the shelf. Upon passing through the stockroom/store door, the pallet tag is killed. The individual box tags are activated and written to with programs required. The boxes sit on the shelf, communicating away. The shelf knows where each box is supposed to be. If it doesn’t recognize the signal, it notifies the store that something is out of place. If someone picks up a dozen razor blades, the store receives an alarm that shoplifting may be in progress. The store also knows at what time, what price, what placement, what shelf will promote the product best by analyzing the historical data. You pick up the Tide. The Shelf knows. You take it to the register and push your cart through. The reader here, as on the shelf, is highly complex. Constant data must be interpreted and managed. Upon checkout, the ecotag shelf program is killed and an inventory program is written. Upon leaving the store, the smart reader recognizes the inventory program. If it recognizes the shelf program, it knows the product hasn’t been paid for and an alarm is issued. If everything is Ok, the store reader kills the inventory program and makes the tag deactivated in order to address the problem of tag clutter. It may initiate recycling, appliance etc programs but the civil rights people are freaking out over this as it is.
The problem with this scenario is that IP and P&G and WalMart are dictating the supply method to all of their suppliers. Wal-Mart’s suppliers must use compatible technology with Wal-Mart’s systems or don’t deal with Wal-Mart. This creates a monopoly and initiates anti-trust action. How to avoid this?
In February 2001, AIM held a meeting chaired by Texas Instruments, which started off with an address by Steve Halliday about anti-trust issues.
To avoid anti-trust, you cannot control the technology supply. Therefore, share the technology. What about the vendors however? How do you assure them that they aren’t buying into a Chinese finger trap and get caught if they start to fight you? Well, we have this little module that can be put into your EXISTING ARCHITECTURE should your suppliers change tags, etc. You can add on whatever SOLUTION NEEDS ARE REQUIRED.
So. Get Society to use the technology. Work backwards through high volume applications until you get back to yourself. No sense IP implementing RFID if they can’t exploit the benefits.
Standards will occur but will not dictate the technology. Different applications maximize or minimize the effectiveness of different platforms.
The overall summary here is that IP provides the manufacture component required at the beginning or it doesn’t work. Marconi provides the user component required or it doesn’t work. IP provides the components required for all of the situations SPECIFIC to each customer along the way. Marconi provides the components at a MINIMUM level to function as needed. It may be read or write or active or passive. The reader must be agile. SO MUST THE TAG! It is estimated that the average tag in retail will experience 30 different actions during the process.
Tires are applicable to every vehicle on the road. Different types of vehicles however require very specific tires. The tires are designed, as a solution for the vehicles needs. The Saturn does not need Corvette tires. The Corvette would not function as required on 4x4 treads.
So why no news for us. Cuz the players want to rush the technology into everyday use before specific standards can be dictated. Working backwards from everyday use into specific activities into the manufacturing gets everyone on board and as long as it works, and saves them money, they’ll do it. By keeping us out of the spotlight, the technology becomes commonplace before realization. If we were promoted as the key, we become the anti-trust focal point. We need TI and IP or they just go on as always and we can tag cows and trucks. They want us though.
SAMSYS IS THE KILLER APP. OUR TECHNOLOGY HAS ALLOWED THE IMPLEMENTATION WITHOUT FEAR OF OBSOLESCENCE.
By having the solution to avoid proprietary technology, we become the solution to anti-trust. Therefore, if TI, Philips, and Marconi get their systems mainstream before the others, the others will be too late. Now they have to compete on the product level, not the solution. Also, TI, Philips, and Marconi will have to remain competitive or lose customers. No more anti-trust conflict.
The new mousetrap will come along, but look how long the process is to remove barcodes.
P.S. TI is investing, developing, DSP technology and just announced a new chip allowing MF/MP for Nokia. This broadband technology is the key for the whole supply chain and smart shelf to work because of the processing demands of all the information. Existing technology cannot handle the data stream yet, within 18 months though! So get it out there and then go full bore |
