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By Mel Duvall  |  Posted 2002-12-01 Print this article Print

Dossier: Texas Instruments blazed trails in radio frequency identification 40 years ago. Some of the technology's commercial applications are only now coming to light.

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Talk to anyone at Texas Instruments (TI) in the Radio Frequency Identification Systems (RFID) division, and they'll quickly point out that the technology is far from new. In fact, RFID systems have been around in various shapes and forms for about 40 years.

But RFID-based systems are just entering the mainstream. And some suggest the technology could become as common as bar codes and credit cards.

Venture Development Corp., a research firm, estimates sales of RFID tags and related systems reached $951 million in 2001. Analyst Mike Liard believes TI captured the biggest portion of sales, but it's still only about 10% of the market.

Retail is a prime market for RFID, with The Gap, Marks & Spencer, and Prada among the early adopters.

Thomas Durovsik, CEO of FreedomPay, a firm implanting RFID payment systems in a number of retail settings, cites several factors behind the technology's rise. First, it's been proven in such arenas as access security control. Second, there's increasing demand to trace the lifecycle of a product, such as a component in an auto. Third, the technology is fast and affordable. Depending on capabilities, tags can cost from 30 to 40 cents each to about $1.

Bloomington-Normal Seating Co., a Bloomington, Ill., manufacturer of seats for automakers such as Mitsubishi, began putting TI RFID tags on seat components earlier this year. Kent Sulzberger, information systems assistant manager, says the tags allow the company to know exactly where each component for a single vehicle is at any time. That means the company can automate data storage for the installation of items such as air bags, which must be kept for warranty and liability matters.

Sulzberger says the technology has performed well. The biggest hurdle is to get employees to follow proper procedures such as placing a tag in the right location.

Jim Hopwood, managing director for Intellident, a British firm which has been rolling out RFID supply-chain systems, uses TI largely because it can produce tags at scale, cheaply. Intellident is installing a system for retailer Marks & Spencer that involves placing more than 1.2 million RFID-tags on plastic totes used for picking and sorting food. The technology reduced by 84% the time it takes to identify items in a container—a process that used to be completed by bar code scanning. Hopwood rates TI as an "excellent" business partner in the project. "They listened to our issues and addressed any concerns."

Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.


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