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Embedding Their Hopes In RFID

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  Matrics Inc., based in Rockville, manufactures its RFID tags at a plant in Columbia. (Courtesy Of Matrics Inc.)


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Keeping Track Companies are finding many uses for radio frequency identification (RFID) tags, which can be monitored to track an object's movement.
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The MIT center has disbanded, but its work is being carried on by EPCGlobal Inc., a corporate-funded organization that later this summer hopes to announce uniform worldwide technical standards for the technology. The group is also issuing privacy guidelines.

Privacy activism, and economic realities, have tempered the expansive rhetoric of the RFID industry, which now is focused on tagging cases or pallets of products, rather than individual items. At a price of between 25 cents and 50 cents for each tag, it is not yet worth it to put them on every can of soda or tube of toothpaste.

"A lot of people are making crazy statements" about how fast the price of a tag -- which typically contains a tiny chip and an antenna -- will fall, said Jeff Woods, an RFID analyst with the market research firm Gartner Group.

Woods said the technology also is still plagued by inaccuracies in reading the data. Certain metals can interfere with the signals, as can moisture on the tags. Woods said many suppliers are telling him that, unlike retailers, they are not likely to reap savings from moving to RFID systems until it is cheap enough to tag individual items.

Even consumer product giant Procter & Gamble Co., an aggressive early tester and booster of the technology, is not yet certain about its near-term financial benefits. The company is participating in the Wal-Mart tests, tagging cases of Pantene shampoo, while testing tags on individual bottles in Germany.

But Wal-Mart is pressing ahead, announcing last week that it was expanding the program to its top 300 suppliers by 2006. Target Corp. and Albertson's Inc. have announced similar initiatives, as has the Department of Defense, which will affect hundreds of suppliers.

"RFID will revolutionize . . . the way we do business around the world, and deliver unimaginable benefits," said Simon Langford, Wal-Mart's global director of RFID.

That is music to the ears of a burgeoning sector of large and small companies making RFID tags and readers, and providing hardware and software integration services.

"I think this will be a single-digit, billion-dollar market in three years," said Piyush Sodha, chief executive of Matrics Inc., a 75-employee Rockville firm that manufactures its tags at a plant in Columbia.

But it is those same unimaginables that worry Katherine Albrecht, a Boston area privacy activist who is leading the charge against RFID. Albrecht, who is working on a doctoral dissertation at Harvard University, founded Consumers Against Supermarket Privacy Invasion and Numbering in 1999 after studying how grocery chains were using loyalty cards to develop marketing data about their customers.

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