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Barcode & RFIDBarcode & RFID
Market Update & 2010 Outlook
Tom WimmerDirector, Auto ID & Transaction Automation Practice
Drew NathansonDirector, 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/t id/f h #autoid/freeresearch.aspx#
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
3 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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?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?
• VDC’s 2010 Market Intelligence Planning Services
Coverage focus shifting from products to the solutions they enable
4 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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 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 competingDeveloping financing models that reduce opportunity costs and free up capital to address competing IT initiatives
5 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
2009 Year in Review: BarcodeR i d i ifi t t ti f b d h dRecession caused a significant contraction of core barcode hardware
Yr/Yr Growth: Core Barcode Hardware
15.0%
5 0%0.0%5.0%
10.0%
2008 2009 2010 2011 2012 2013
-20.0%-15.0%-10.0%-5.0% 2008 2009 2010 2011 2012 2013
-25.0%
Handheld Scanners Stationary Scanners Barcode Printers TOTAL
2008 2009 2010 2011 2012 2013
6 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
2009 Year in Review: RFID G th l d b t id t t hi t i l th t dGrowth slowed but rapid return to historical growth expected
Yr/Yr Growth: Core RFID Hardware
25.0%
10.0%15.0%20.0%25.0%
-10 0%-5.0%0.0%5.0%
2008 2009 2010 2011 2012 2013
-10.0%
Transponders Readers Printer/Encoders Total
2008 2009 2010 2011 2012 2013
7 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
What were the underlying causes of contraction?Gl b l R i I t C AIDC S t H d t
• The global recession brought contraction in demand, production and employment, which in-
Global Recession Impacts Core AIDC Segments Hardest
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.
8 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Which product segments of the AIDC market were most impacted by the recession?p y
• Most Impacted: Barcode • Most Impacted: RFID
Laser scanners
• Handheld
• Stationary
Readers
Printer/Encoders
EPC UHF Hardware
Stationary barcode label printers
• Least Impacted: Barcode
Imagers
• Least Impacted RFID
Middleware/Edgeware
Installation/Integration Services
Scan engines
Mobile transaction printers
Consumables
9 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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 Aggressive focus on channel management, retention and support
• One of the most successful and oft overlooked:
Deployment of new business models aimed at mitigating risk while maximizing value
10 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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?
11 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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 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 requirementsPushes back onto the supply community to mitigate risk, meet current and future 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
12 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
systems – and consumers
Which market segments will provide the strongest near-term growth opportunities?g pp
V ti l M k t A li tiVertical Markets Applications
Health Care
Commercial Services
Government
Patient Safety
Asset and People Tracking
Field Sales/Serviceode
Government
Specialty Retail
Field Sales/Service
Self-Service & Customer Interaction ManagementBar
c
Commercial Services
Electronics
Supply Chain Management
Asset & People Tracking
Government
Health Care
Manufacturing
Pharmaceuticals
Ticketing
Contactless Payment
Sensing/Monitoring
ID/Access Control/Security
RFI
D
13 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Pharmaceuticals
Retail
ID/Access Control/Security
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
TicketingTicketing
MRO (Maintenance, Repair, Overhaul)
WIP and Sample Tracking
LBS (Location Based Services)
14 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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 The Deployment of Project Management Offices to support key accounts and high growth segments
15 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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 formatuse environments, supplier strategies … provided in a higher value add and less complex format
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 2010p
16 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
2010 Schedule and Core Deliverables: Barcode
RESEARCH SCHEDULE AND DELIVERABLES
Volume 1: Handheld Scanners, Offering Segment Analysis May 2010Volume 2: Stationary Scanners, Offering Segment Analysis May 2010Volume 3: Barcode Printers, Offering Segment Analysis June 2010Volume 4: Barcode Printer Consumables, Offering Segment Analysis June 2010, g g yVolume 5: Customer Requirements Analysis (across all product types) July 2010
Vendor Profiles Delivered as part of the Offering Segment AnalysisDistribution 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
17 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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
Ph I t i
Handheld Barcode Scanner Suppliers 15
Stationary Barcode Scanner Suppliers 10
B d P i t S li 20Phone Interviews Barcode Printer Suppliers 20
Barcode Printer Consumables Suppliers 20
Di t ib t ll VAR /SI 25Distributors, resellers, VARs/SIs 25
Web-based Interviews End users, distributors, resellers, VARs/SIs Target N > 500
18 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
2010 Schedule and Core Deliverables: RFID
RESEARCH SCHEDULE AND DELIVERABLESVolume 1: RFID Transponders, Transponder ICs, and Inlays, Supply-Side Analysis May 2010Volume 2: RFID Readers, Supply-Side Analysis May 2010Volume 3: RFID Printers/Encoders, Supply-Side Analysis June 2010Volume 4: RFID Middleware/Edgeware, Supply-Side Analysis June 2010Volume 5: RFID Professional Services Supply Side Analysis July 2010Volume 5: RFID Professional Services, Supply-Side Analysis July 2010Volume 6: Contactless Smartcards and RFID Ticketing Systems, Supply-Side Analysis July 2010Volume 7: RFID Vertical Markets, Data Book August 2010Volume 8: RFID Applications, Data Book August 2010Volume 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 SizeForecast Market Size
Service Year 2010 2009 2010-2014
19 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
Monthly status reports Begin March 2010Interim 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
Phone Interviews
RFID Transponder and Reader IC Suppliers 10
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
20 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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
21 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice
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 WimmerDirector, Auto ID and Transaction Automation Technologies [email protected] | 630-279-7959
Drew NathansonDirector, Research [email protected] | 508-653-9000 ext. 148
Peter Doran Account [email protected] | 508-653-9000 ext.139
22 – 2010 VDC Research Group, Inc.AutoID & Transaction Automation Practice