A worthy readFor those of you plagued by uncertainty, the following puts RFID in perspective and suggests who the major participants will likely be. Noteworthy is Symbol's placement in the herd.
From the pages of Modern Materials Handling
Top 20 ADC Suppliers
By Bob Trebilcock, Editor at Large -- 9/1/2004
No news - or at least no major news - was good news for the automatic data capture (ADC) industry over the last year.
There were few mergers or acquisitions. Most of the legal matters hanging over the industry were resolved. And despite the huge amount of hype about RFID, spending on these initiatives in the supply chain was actually quite modest.
Instead, bar code scanning and printing solutions, and rugged mobile computers remained the leading ADC technologies used in manufacturing, warehousing and distribution. The industry's leading providers quietly posted healthy revenues in 2003.
"The majority of companies had a strong year, with 5 to 15% growth," says Taylor Smith, AIDC analyst, Venture Development Corp., a research group that focuses on the ADC industry (508-653-9000, www.vdc-corp.com).
VDC tags the overall industrial market at just under $5 billion, not counting RFID or consumables, such as the media used for printing bar codes.
What drove the overall ADC market? "The biggest factor was just the turnaround of the global economy," says Smith. "Projects that had been on hold for two or three years finally went ahead."
While industrial users continue to expand their use of bar codes for product identification in the supply chain, Smith says the need for part marking, lot tracking and product traceability is driving the use of more 2D symbologies in the automotive and aerospace industries. These include Data Matrix symbologies in parcel handling, and Data Matrix and Reduced Space Symbologies (RSS) in pharmaceuticals.
Of particular note looking forward, the U.S. District Court of Nevada ruled that 14 patents on bar code readers and machine vision systems held by the late Jerome Lemelson and the Lemelson Foundation were invalid in January 2004. The court said the patents were invalid, unenforceable and not infringed.
A group of seven ADC suppliers had brought suit against Lemelson to have the patents invalidated. Lemelson and his Foundation had collected more than $1 billion in royalties from end users of bar codes and machine vision.
Status quo
This is the third year that Modern has compiled a list of the leading automatic data capture providers worldwide.
As before, the list includes companies that manufacture and sell ADC systems, hardware, and software for industrial manufacturing and distribution applications in the United States and worldwide. Moderndoes not include resellers, systems integrators or other companies that do not manufacture ADC hardware.
Since the industry includes public companies like Symbol as well as privately held companies, the list is compiled from annual reports as well as input from industry analysts like VDC's Smith.
This year's leader board looks similar to previous years' lists, but does include one new name near the top.
Symbol Technologies (866-416-8545, www.symbol.com) remains in the #1 spot with $1.53 billion in total revenue, up from $1.32 billion the prior year.
Just as importantly, a reinvigorated Symbol spent the last twelve months putting its finances, management, and legal houses in order. Along with a new CEO, the company reached agreements with the U.S. Department of Justice, the SEC, and class action lawsuits that were pending. Finally, Symbol recently reached a cross-licensing agreement to settle patent litigation with HHP (800-782-4263, www.hhp.com), which stands at #10 with $145 million in revenue.
The number two provider was once again Intermec (800-934-3163, www.intermec.com), at $706 million, up 9% from the prior year.
Taking the number three spot with $550 million in revenue after acquiring Accu-Sort and Willett is Danaher (202-828-0850, www.danaher.com). Accu-Sort was #16 as a stand-alone company in last year's listing with $110 million in revenue.
Close behind in the fourth spot is Zebra Technologies (800-423-0422, www.zebra.com) at $536 million, up from $476 million for the prior year. Zebra was bumped from its third place spot in last year's listing by Danaher.
Further down the list are three additional new entries this year. At #6 and $287 million in revenue is Imaje (770-421-7700, www.imaje.com), a French provider of industrial marking and bar coding solutions with a North American presence. Voice-identification provider Vocollect (412-829-8145, www.vocollect.com) comes in at #18 with $75 million. And at #19 is RFID-provider Savi Technologies (408-743-8000, www.savi.com) with $70 – $75 million, according to analyst estimates.
Meanwhile, PSC, Inc. (541-683-5700, www.psc.com) went private, and came in at #8 with $186 million in revenue.
RFID is coming
Few technologies have garnered as much press attention as RFID in the year since the Department of Defense, Wal-Mart, and several other retailers began piloting the technology.
While RFID across all applications is a billion dollar industry today, less than 10% of that revenue is currently associated with industrial supply chain activities. VDC's Smith believes it will be 2006 or later before RFID revenues have a significant impact on the overall growth of the industry. "The level of interest in RFID has exploded, but people aren't spending a lot on pilots and we're almost through 2004," says Smith.
What will it take for RFID to impact the total revenues for the industry? "We still need to answer whether RFID can do in the supply chain what people want it to do from a performance and pricing standpoint," says Smith. "That hasn't really been proven yet."
Going forward, keep an eye on companies like Alien, ThingMagic, Samsys, and Rafsec—their revenues are too small now to gain a spot on the top 20 list, but that may change in the future. However, Smith, like many other analysts, also expects silicon providers like Philips, TI, Hitachi, and now Symbol, with its purchase of Matrics, as well as established supply chain leaders like Siemens, SAP, Oracle, and Sun Microsystems, to make their presence felt in RFID.
Top 20 ADC Suppliers
Rank Company Worldwide 2003 Fiscal Year Rev., Million $ North American Headquarters Products Web site
1 Symbol Technologies 1,530 Holtsville, N.Y. Scanning systems; Key-based handheld devices; Stationary and vehicle-mount computers and Wireless LAN infrastructure; RFID tags and readers www.symbol.com
2 Intermec Technologies 706 Everett, Wash. Mobile computing systems; Wireless LANs; Handheld computers; Bar code scanners; Bar code printers and media; RFID tags and readers www.intermec.com
3 Danaher 550 Washington, DC Laser bar code scanners; CCD readers and imaging systems; RFID systems; Integrated systems for materials handling; Dimensioning equipment www.danaher.com
4 Zebra Technologies 536 Vernon Hills, Ill. Specialty printing solutions including thermal bar code label and receipt printers, plastic card printers, RFID smart label printer/encoders, thermal printing supplies, label design/integration software, and printer connectivity and networking solutions www.zebra.com
5 Sato Corp. 389 Charlotte, N.C. Thermal bar code and RFID smart label printer/encoders www.satoamerica.com
6 Imaje 287 Kennesaw, Ga. Ink-jet printers, laser coding devices, software www.imaje.com
7 Psion-Teklogix 211 Mississauga, Ontario Fixed, vehicle-mounted, portable, and wedge data collection terminals www.psion-teklogix.com
8 PSC 186 Portland, Ore. Handheld scanners; Scan modules and engine; Connectivity software for wireless LANs; Fixed, vehicle, and portable data collection terminals www.psc.com
9 Denso ID Systems 171–177(1) Southfield, Mich. Handheld scanners and portable terminals www.denso-id.com
10 Hand Held Products (HHP) 145 Skaneateles Falls, N.Y. Handheld bar code scanners and readers; portable computing and data terminals www.hhp.com
11 Metrologic Instruments 138 Blackwood, N.J. Fixed and portable bar code scanners, RFID; Data collection terminals www.metrologic.com
11 Printronix 138 Irvine, Calif. Bar code printers; Fixed and handheld bar code scanners; Bar code verification; Printers; Software; Related supplies www.printronix.com
13 Datalogic 131 Hebron, Ky. Fixed and portable bar code scanners, readers; RFID www.datalogic.com
14 Toshiba Tec 130(2) Atlanta, Ga. Thermal bar code label printers; wireless LAN solutions; POS systems www.tecamerica.com
15 LXE 101 Norcross, Ga. Hardware: Wireless and tethered scanners; Wireless, rugged handheld computers; Wireless, vehicle-mount computers; Wireless network infrastructure; Management software; Services www.lxe.com
16 Weber Marking Systems 100 Arlington Heights, Ill. Printing and coding systems, supplies and software including label and RFID printers, applicators, and printer applicators; Ink jet and laser coders; data capture devices; pressure-sensitive labels; ribbons and inks www.webermarking.com
17 DATAMAX 96 Orlando, Fla. Thermal transfer label printers, automatic identification hardware/software, labels www.datamaxcorp.com
18 Vocollect 75 Pittsburgh, Pa. Voice collection systems www.vocollect.com
19 Savi Technologies 70–75(3) Sunnyvale, Calif. RFID technology www.savi.com
20 SICK 60–70(3) Minneapolis, Minn. Fixed-position and handheld bar code scanners www.sick.com
NOTE: (1) estimate based on growth of non-automotive industrial, of which Auto ID is a key component; (2) sales of retail information system which includes Auto ID; (3) industry estimate from VDC