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The Electronic Product Code (EPC) RFID tag market shows potential for a dramatic overhaul during the late 2004/early 2005 period, according to the latest market intelligence report from ABI Research.
Faced with meeting mandates from both commerce and government, the Hardware Action Group established by EPCglobal is now trying to iron out differences in several proposals for a standardised Generation 2 UHF (868-956 MHz) EPC air-interface protocol (which determines how tags and readers communicate). The deadline for completing the standard is October 4th, 2004.
Three players
Currently, proposals from three groups are under consideration and each includes different sets of integrated circuit and transponder manufacturers. The first, known as the Unified Group, consists of Philips, Texas Instruments and Impinj. The second group, called the Performance Team, consists of EM Microelectronic Marin, Matrics, Atmel & a couple of smaller companies. The third group, known as the Q Proposal, is being championed by Alien Technology.
Although all the proposals, which are based around ISO 18000-6A, are broadly similar in technical terms, there are enough differences to redraw the map of the RFID supply chain depending upon which one finally wins. And, according to ABI, this could have less to do with technology than with timing.
Picking a standard
Matrics (with its UHF Class 0 chips) and Alien Technology (with its Class 1 chips) have been market leaders so far - in fact, all the tests done up to now have used tags from one or the other. But according to ABI's principal analyst Erik Michielsen, "Once the protocol is ratified, those chips will be phased out and replaced with Generation 2 chips, so all the advantages those companies have will become decreasingly significant by the end of this year."
Winner or loser?
With the playing field suddenly levelled, the first player into the market in large quantity will almost certainly seize the 'high ground'. Michielsen says that the backers of the winning proposal will be in an enviable position because they will be able to set up their design and fabrication capabilities more quickly than the others. For example, Michielsen explained: "If TI and Philips win, they'd have their designs and will be ready to have their fabs built, and they can immediately start producing hundreds of millions of these chips."
Of course this also means that the backers of the losing standards may suffer delays of a month or two, especially if they outsource their fabrication. And, according to ABI, even such a short time lag could be critical.
Source: ABI Research
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