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 Wal-Mart study shows case-level RFID reduced out of stocks by 16% 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

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

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

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

21. ADOPTION RATES 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 Whither Wal-Mart?

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

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 architecture anti-counterfeiting EPCglobal (www.epcglobalinc.org) Business action groups

25. RFID EVENTS EPC Connection 2007 In Partnership with EPCglobal North America Oct. 2-4, 2007 Donald E. Stevens Convention Center Chicago, IL RFID Journal LIVE! Europe 2007 3 rd Annual Conference & Exhibition November 5-7, 2007 Mövenpick Hotel Amsterdam City Center Amsterdam RFID Journal LIVE! Canada, in partnership with EPCglobal Canada 2 nd 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!