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TWST: What is Sirit?
Ms. They take our RFID readers and embed them into their handhelds,
printers, forklifts, or fixed readers and so on. And finally, we are
also involved in a number of areas in the RFID industry, targeting other
applications such as cashless payments and asset management. One example
of a cashless payment application is ExxonMobil's Speedpass program.
This is deployed to over 8 million customers across North America and
Asia and is used to pay for gas purchases. Sirit makes the readers that
are built into those gas pumps. As an RFID technology provider, we span
a wide array of applications. TWST: Give us an idea of how the overall market for RFID is divided.
What is it that differentiates how a company approaches those market
segments? What is the market share today for Sirit and the potential
markets for Sirit?
Mr. Dawalibi: Each one of those markets is different. For the last
couple of years, people have mostly been associating RFID with supply
chain because they see the enormous opportunities in that marketplace.
If you think about it, eventually anything that's being manufactured,
anything that's being distributed, and anything that's being sold around
the world will be carrying an RFID tag. The numbers become extremely
large in terms of the potential business opportunity. That is what has
caught the market's imagination in terms of the potential RFID has in
the supply chain. However, that market is still fairly small because at
this point in time, what you are seeing is companies mostly completing
pilots and tests in terms of the technology. The implementation of RFID
represents a major change in terms of the overall infrastructure. So
that market is still, like I said, fairly small, but the opportunity for
growth is huge. This is what most people are thinking about in terms of
'RFID.' If you look at VDC's numbers (Venture Development Corporation is
the Boston-based group of market analysts who look at the market and try
to quantify the size of the market) ' their view was that in 2004, the
overall market for RFID technology was about $1.7 billion worldwide.
Hardware represented the majority of that; $1.2 billion out of the $1.7
billion was hardware. And overall, the market is expected to experience
substantial growth. Hardware is growing at about 28%, software at about
60%, and services at 48%. And they are forecasting that by 2008, the
overall market will be about $5.9 billion. Like I said, within that,
supply chain is still fairly small. In 2004, it represented something
like 4%. But by far, it will have the highest growth rate and the
biggest opportunity. But within that market, there are other sectors
like Automatic Vehicle Identification (which includes tolling), which
have been established for a long, long time. We have been in the tolling
business for over 12 years, so RFID is not a new technology for us. That
market is a lot more penetrated than supply chain. While it is
substantial in terms of numbers, it won't have the same growth rate as
the supply chain. And the other applications of RFID are somewhere in
between. Depending on the application, be it asset management or be it
cashless payments, each one of those applications has different growth
factors, which market watchers such as VDC have data and projections on
to give us the overall perspective of that market. Overall, when we look
at the total market, it is growing at over 35% per year between now and
2008.
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