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Barcodes for the New Millenium

The market for radio frequency identification tags may finally be coming into its own

At Blue C Sushi, chefs place dishes of sushi on a conveyer belt that circulates in front of customers so they can pick the items that look particularly tasty. RFID technology is used to track which items customers have chosen so that the chefs know which to replenish. The system also helps with quality control, warning chefs when a sushi dish has been circulating too long and should be thrown away. (Photo by Intermec Technologies / John Gallagher)

The uses for RFID technology are varied, with applications from shipping and inventory management to credit processing and security.

In Seattle's Pioneer Square, a blind tourist can use it to activate an informational recording at a phone booth.  At Bellevue's Overlake Hospital, it's used to ensure against mix-ups as genetic material goes through the in vitro fertilization process. For the Boeing Co., it's a way to track vital safety equipment and other critical parts on jetliners.

Radio frequency identification, commonly known as RFID, hasn't replaced the bar code, as predicted over the past few decades. It's not yet practical for that.

But the technology is finding its way into a widening array of specialized tasks and industries, with help from a number of Washington companies.

"This is going to be one of those things where somebody's going to wake up in 2010 and say RFID was an overnight success. In reality, this is spreading at different rates in different industries," says William Colleran, Impinj Inc.'s president and CEO.

The seven-year-old company was the first to sell new-generation RFID tags, which helped to boost its revenue from "several million dollars" in 2005 to four times that amount this year, Colleran says. Impinj also makes the electronic units that detect and read the paper-thin tags.

With roots dating to World War II, RFID technology isn't new. It moved forward greatly in the laboratory during the 1960s and '70s, when predictions of its impending boom were rife.

Many people rely on RFID every day without a second thought. It has been used for years in key cards that open secured employee entrances. Commuters benefit from it in windshield-affixed passes that let them automatically pay while speeding through toll booths, as on the new Tacoma Narrows bridge.

RFID tags are simply tiny radio transponders consisting of microchips and mini- antennas. With the chip, they can hold much more information than a bar code. Data stored on the tags can be rewritten hundreds of thousands of times.

Active tags add batteries and send a signal to electronic reading devices. Cheaper passive tags don't broadcast their own signal but can be detected as they move past reading devices.

While active RFID tags are expanding in use, the lower-cost passive tags are the kind used most often to keep tabs on shipping pallets, airplane parts and military equipment. The new generation of passive chips, known as Gen2, can be read more reliably and from farther away than ever.

Like Impinj, Everett-based Intermec Inc. was active in the industry's development of the Gen2 standard. The company holds critical RFID patents - many acquired a decade ago from IBM - and is hoping the technology's expansion creates sizable revenue one day. Credited with inventing the world's most widely used bar code symbology, Intermec already has a big presence in the inventory-tracking sector.

Patrick Byrne, who took over the company's reins this summer, says RFID sales make up a small fraction of the $800 million to $900 million in revenue Intermec has generated annually during the past few years. The key thing, he says, is to make sure Intermec has its intellectual property secured and to keep educating customers about RFID.

"We see RFID as a growth engine for Intermec," adds Chris Kelley, the company's director of RFID.

RFID EVERYWHERE

Intermec's tags and equipment are used in the Nexus program, which cuts crossing times for more than 50,000 enrollees who frequently pass between the United States and Canada. At the Seattle-based Blue C Sushi restaurant chain, RFID devices from Intermec and Microsoft track food quality and orders as they move from the kitchen to the customer.

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© Washington CEO Magazine 2008