The State of RFID/EPC Today: Where We Are and Where We are Going

2. The State of RFID/EPC Today:Where We Are and Where We are Going Factors That Are Affecting Adoption Across Major Markets

3. INTRODUCTION Mark Roberti Founder and Editor RFID Journal Mroberti@rfidjournal.com

4. ABOUT RFID JOURNAL • RFID Journal was founded in 2002 • First RFID publication • Largest Web site: 250,000 unique visitors per month and 2 million page views • Leading provider of RFID events • Leading magazine with 10,000 circ.

5. PRESENTATION SUMMARY The major developments in RFID/EPC • Tag price/performance • Standards development • Proving the business case • State of the market today • What’s needed before adoption rises

6. PRICE/PERFORMANCE Tag price/performance improves with EPC UHF Gen 2 Standard

7. TAG PRICE/PERFORMANCE Immediate benefits of Gen 2: • Lower power consumption = longer read range • Faster read rates • Better ability to read tags on cases on pallets • Better overall system performance and reliability

8. TAG PRICE/PERFORMANCE Tag Prices Start to Fall in Sept. 2005 • Avery Dennison says it will sell its AD-220 inlay for 7.9 cents each (1 million or more)

9. TAG PRICE/PERFORMANCE Prices are unlikely to fall much further • Inlays are about 8 cents • Tags still cost about 15 cents • Companies selling at a loss • If volumes go up, costs will fall further

10. STANDARDS DEVELOPMENTS Standards continue to evolve

11. STANDARDS DEVELOPMENTS The first truly international UHF standard • In July, EPC Gen 2 was approved as an ISO Standard (18000-6C) • Gives end users confidence in the interoperability of EPC equipment • Gives countries, such as China, the opening to adopt EPC as their national standard

12. STANDARDS DEVELOPMENTS EPCglobal’s approves a format for exchanging data • XML used to define what tag reads mean • Reads are associated with time, location and status and other factors • Manufacturer can know that a product was damaged and brought to back room

13. STANDARDS DEVELOPMENTS EPCglobal’s publishes EPC Informa-tion Service standard in April 2007 • The standard allows supply chain partners to share data securely • System can scale so one supplier can send and receive EPC data with one system • Should be more cost effective than EDI and other data exchange systems

14. STANDARDS DEVELOPMENTS • Group is examining need for: • HF standard • Greater tag security • Business and technical requirements for item-level tagging EPCglobal’s Item Level Work Group works on standards for item-level tags

15. STANDARDS DEVELOPMENTS • Reduce counterfeiting • Create e-pedigrees for drugs • Reduce theft • Reduce store inventory • Increase sales of high-value goods End users interested in item-level tagging to:

16. PROVING THE BUSINESS CASE Early adopters prove there are benefits in using RFID both internally and across the supply chain

17. PROVING THE BUSINESS CASE • Up to 62% on fast-moving items • Out-of-stock items with EPCs were replenished more quickly • 10% reduction in manual orders • Reduction in time spent looking for inventory Wal-Mart study shows case-level RFID reduced out of stocks by 16%

18. PROVING THE BUSINESS CASE • Promotional compliance only 50 to 90% • Sales rise 20% or more when promotions executed right • Increase in total promotional sales of 1% More companies tracking promotions:

19. PROVING THE BUSINESS CASE • Airbus • Handleman • John Deere • Northrup-Grumman • Shaw Industries Companies are finding internal benefits: • Metro AG • Volvo • Esquel • Lemmi Fashion • Nick Tentis

20. ADOPTION RATES Why isn’t adoption moving more quickly? • Challenges more significant than many realized: • Overcoming physics issues • Determining where the ROI is • Changing internal and supply chain processes takestime

21. ADOPTION RATES Whither Wal-Mart? • Stories suggesting Wal-Mart is backing off are not correct • Wal-Mart is integrating RFID to the business side, instead of a special project • Some pushback • Technology issues surrounding GDS

22. ADOPTION RATES Companies across all industries are experimenting with RFID: • Pharmaceutical companies • Health care providers • High-end apparel and accessory companies • Create solutions that scale • Aerospace • Chemical industry • Forestry and paper

23. WHAT LIES AHEAD Apparel/Footwear companies need to: • Agree on an industry standard • Address privacy concerns • Think infrastructure but deploy in targeted ways • Companies must collaborate

24. WHERE TO GET GOOD INFORMATION • RFID Journal (www.rfidjournal.com) • Information you can rely on • RFID Alliance Lab(www.rfidalliancelab.org) • Performance testing • Auto ID Labs(www.autoidlabs.org) • SIGs on packaging, network architectureanti-counterfeiting • EPCglobal(www.epcglobalinc.org) • Business action groups

25. RFID EVENTS EPC Connection 2007 In Partnership with EPCglobal North AmericaOct. 2-4, 2007 • Donald E. Stevens Convention Center • Chicago, IL RFID Journal LIVE! Europe 2007 3rd Annual Conference & Exhibition November 5-7, 2007 Mövenpick Hotel Amsterdam City Center • Amsterdam RFID Journal LIVE! Canada, in partnership with EPCglobal Canada 2nd Annual Conference & Exhibition November 26-28, 2007 • Toronto Congress Centre • Toronto, Canada RFID Journal LIVE! 2008 6th Annual Conference & Exhibition Apr. 16-18, 2008 Venetian Hotel • Las Vegas, NV

26. CONTACT INFORMATION Mark Roberti Founder & Editor RFID Journal mroberti@rfidjournal.com

27. Thank You!