CYBRA Hopes for Big Uptick in RFID Spending
June 22, 2010 Alex Woodie
CYBRA, a developer of barcode and radio frequency identification (RFID) solutions for the i/OS marketplace, recently announced that it expects sales of RFID solutions to increase by more than 25 percent this year, as worldwide demand for RFID solutions increases, particularly in the clothing industry.
In the mid-2000s, there was hardly a technology as over hyped as RFID. With Wal-Mart pushing an RFID mandate onto its suppliers, analysts predicted that the technology would fundamentally change how manufacturers, distributors, and retailers moved goods through the supply chain.
Despite the mandates, RFID never really took off. The per-unit cost of the RFID tags was one of the major reasons it didn’t really catch on. Another big reason was the dubious returns of companies that put millions of dollars into building RFID-based warehousing and distribution systems, but saw little benefit, other than keeping their market-masters happy.
Fast forward through the Great Recession, to the economic recovery of 2010 and 2011, and some vendors, like CYBRA, are forecasting a resurgence in demand for RFID.
“We have seen a significant growth in interest for RFID technologies over the past few months, particularly in the apparel industry,” says Harold Brand, CEO of CYBRA, a public company whose stock is traded on the OTC Bulletin Board.
“We believe that CYBRA remains uniquely poised as, to the best of our knowledge, the only provider of RFID software solutions designed specifically for the industry-leading IBM Power Systems platform, as companies move from speculative pilot programs to real-world implementation,” Brand continues.
CYBRA, which is based in Yonkers, New York and sells the popular MarkMagic barcode software and AutoID RFID software products for the System i (Power Systems) server, says it expects its RFID revenues to increase 25 to 30 percent this year. It bases this figure on analyst expectations for sales of RFID software and gear to grow at a 28 percent compound annual growth rate (CAGR) through 2013. CYBRA also relied on this prediction to forecast a 35 to 40 percent increase in total company revenues for the year.
Hopefully, these numbers turn out to be true. However, it should be remembered that much lower analyst predictions than 28 percent CAGR in RFID spending have turned out to be wrong in the recent past.
There are undoubtedly pockets of hope in the RFID market, such as the apparel industry, which has long been a stronghold for System i servers and applications, or in detecting fraud, which is another area where CYBRA is making headway. But without a sizable reduction in the per-unit costs of RFID gear, the chances of a broad based up-tick in strategic RFID investments in the big US supply chains seem slim.