www.vics.org1 ©2008 Voluntary Interindustry Commerce Solutions (VICS) Association

VICS/AAFA Item-Level RFIDTECHNOLOGY UPDATE

January 15, 2008

RICK BAUER

www.vics.org2 ©2008 Voluntary Interindustry Commerce Solutions (VICS) Association

RFID Value Chain

IC(RFID Chips)

InlaysAntenna

Printers/ Encoders Readers Software Integration-

ServicesTags

www.vics.org3 ©2008 Voluntary Interindustry Commerce Solutions (VICS) Association

IC(RFID Chips) RFID CHIP DEVELOPMENTS

• RECENT IMPROVEMENTS– IMPROVEMENT IN CHIP SENSITIVITY DOUBLING OF READ RANGE– 40% REDUCTION IN CHIP SIZE– ADDITIONAL MEMORY SIZE FROM 128 BITS TO 512 BITS– INTERFERENCE IMPROVEMENTS IN CHIP LOGIC– HIGHER QUALITY YIELD BASED ON STABLE DESIGNS

• 2008 EXPECTATIONS– IMPROVED CHIP SENSITIVITY OF 10-20%– EAS FEATURE ENHANCEMENT– EXPANDED MEMORY UP TO 64KB

• NET IMPACT– LOWER COST, IMPROVED READ RANGE, HIGHER QUALITY & MORE

APPLICATION USE FOR ITEM MARKING

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RFID Value Chain

Tags Readers Software Integration-Services

InlaysAntenna

IC(RFID Chips)

Printers/ Encoders

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InlaysAntenna INLAY DEVELOPMENTS

• RECENT IMPROVEMENTS– NEW METHODS OF ANTENNA PRODUCTION INSTEAD OF

METAL ETCHING– COPPER DEPOSITION & ALUMINUM DIECUTTING– IMPROVED METHODS OF ATTACHING CHIPS– GLOBAL ANTENNA DESIGNS– ANTENNA DESIGNS WITH NEAR FIELD ELEMENTS

• 2008 EXPECTATIONS– SMALLER HIGH PERFORMANCE INLAY DESIGNS– MORE CHIP MANUFACTURERES ENTERING MARKET

• NET IMPACT– REDUCED SIZE HIGHER PERFORMANCE INLAYS FOR ITEM

MARKING WITH EXPECTED COST IMPROVEMENT

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RFID Value Chain

Tags Readers Software Integration-Services

InlaysAntenna

IC(RFID Chips)

Printers/ Encoders

www.vics.org7 ©2008 Voluntary Interindustry Commerce Solutions (VICS) Association

Tags TAG & LABEL DEVELOPMENTS

• RECENT IMPROVEMENTS– HIGHER SPEED CONVERSION EQUIPMENT– READER TEST EQUIPMENT CAPABLE OF HIGHER SPEED

TESTING– HIGH PERFORMANCE HARD TAGS FOR ITEM ASSET AND

METAL APPLICATIONS• 2008 EXPECTATIONS

– INCREASED PRODUCTION GLOBALLY

• NET IMPACT– HIGHER VOLUME & STANDARDIZATION WILL IMPROVE

COST

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RFID Value Chain

Tags Readers Software Integration-Services

InlaysAntenna

IC(RFID Chips)

Printers/ Encoders

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Printers/ Encoders PRINTER/ENCODER DEVELOPMENTS

• RECENT IMPROVEMENTS– STANDARDS FOR PROGRAMMING ADDITIONAL CHIP

MEMORY– IMPROVEMENT IN ENCODING RELIABILITY

• 2008 EXPECTATIONS– SMALLER MOBILE PRINTERS BASED ON NEW SMALL READER

DEVELOPMENT• NET IMPACT

– IMPROVED RELIABILITY OF OPERATION AND FLEXIBILITY FOR ITEM MARKING APPLICATIONS

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RFID Value Chain

Tags Readers Software Integration-Services

InlaysAntenna

IC(RFID Chips)

Printers/ Encoders

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Readers READER DEVELOPMENTS

• RECENT IMPROVEMENTS– SINGLE CHIP READER RELEASE (Intel) ENABLING MOBILE

APPLICATIONS– STANDARDIZEDREADER PROTOCAL (LLRP)– DENSE READER MODE CAPABILITY IMPROVING CONTROL IN

MARGINAL PERFORMANCE ZONES (EUROPE)– DIRECTIONALITY READS USING SOFTWARE READER CONTROL

• 2008 EXPECTATIONS– EXPANSION OF MOBILE OFFERINGS WITH HIGHER PERFORMANCE– POWER OVER ETHERNET FOR READERS– HIGHER PERFORMANCE ANTENNA DESIGNS (NEAR/FAR FIELD)

• NET IMPACT– IMPROVED SMALL READER PERFORMANCE, REDUCED COST

www.vics.org12 ©2008 Voluntary Interindustry Commerce Solutions (VICS) Association

RFID Value Chain

Tags Readers Software Integration-Services

InlaysAntenna

IC(RFID Chips)

Printers/ Encoders

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Software SOFTWARE DEVELOPMENTS

• RECENT IMPROVEMENTS– MICROSOFT BIZTALK RELASE OF IMBEDDED RFID SUPPORT– CONFIGURABLE SOFTWARE SYSTEMS TO CONTROL RFID

DEVICES INDIVIDUALLY– INCREASED ASSET TRACKING PROGRAMS SUPPORTING

QUICK ROI– CUSTOMIZED APPLICATIONS FOCUSED ON SPECIFIC

SOLUTIONS• 2008 EXPECTATIONS

– MORE SIMPLIFIED SOFTWARE TO ASSIST QUICK PILOTS & ADOPTION

• NET IMPACT– SIGNIFICANT IMPROVEMENT IN FLEXIBILITY AND SPEED OF

ADOPTION

www.vics.org14 ©2008 Voluntary Interindustry Commerce Solutions (VICS) Association

RFID Value Chain

Tags Readers Software Integration-Services

InlaysAntenna

IC(RFID Chips)

Printers/ Encoders

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Integration-Services INTEGRATION & SERVICES DEVELOPMENTS

• RECENT IMPROVEMENTS– ITEM SPECIFIC CUSTOMER INTERFACE ENHANCEMENTS

• CUSTOMER EXPERIENCE MAGIC MIRROR• INTERACTIVE KIOSKS• LOYALTY PROGAMS

– DIAGNOSTIC TOOLS TO IMPROVE RELIABILITY OF SITE IMPLEMENTATION

– INCREASE IN CERTIFIED GLOBAL LABORATORIES • 2008 EXPECTATIONS

– PACKAGED CONFIGURABLE INTEGRATIONS SYSTEMS OF RFID COMPONENTS

• NET IMPACT– FASTER, MORE RELIABLE LOWER COST IMPLEMENTATIONS WITH

ENHANCED CUSTOMER EXPERIENCE

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SUMMARY

• 2007 KEY YEAR OF SIGNIFICANT TECHNOLOGY IMPROVEMENT

• TECHNOLOGY IS STABLE AND READY FOR WIDE SCALE DEPLOYMENT

• READER COST & PERFORMANCE IMPROVEMENTS EXPECTED IN 2008

• REAL ROI OPPORTUNITY EXISTS IN ALL LEVELS OF ITEM IMPLEMENTATION OF THE TEHNOLOGY

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Contact information

Rick BauerDirector, RFID Global Program DevelopmentAvery Dennison Retail Information Services170 Monarch Lane Miamisburg, OH 45432Tel: 937-865-2031E-Mail: rick.bauer@paxar.com

BOOTH #435