Omni-ID’s Outlook on the RFID Industry: Cautiously Optimistic

The first quarter of 2009 was difficult for many companies in our industry. And it was a tough quarter for Omni-ID as well.

In our second quarter, however, we saw a significant uptick in business – resulting in the best revenue quarter in our 2-year history. We saw not only an increase in the number of orders, but also in the size of orders – moving from tens of thousands of RFID tags to hundreds of thousands. And we’re seeing a lot of activity for Q3 and Q4. So this leads me to feel cautiously optimistic about the second half of this year – for Omni-ID, and for the RFID industry as a whole.

“So, does this mean that the economic downturn has hit the “tipping point”? And is this increase in activity an indication that the RFID industry has crossed the chasm into the mainstream global economy?”

Well, I think it is too early to call it an economic recovery. And, no, I don’t think that I would say that as an industry that we’ve crossed the chasm. But from my perspective, I am seeing more and more business pragmatists getting involved in RFID. They are looking to address real mainstream business issues and discovering that RFID can address these issues. . . and in the process RFID is bringing real value to their business. As a result, people are beginning to turn to RFID for practical business solutions, not just cool technology.

I just returned from a week-long visit to the East Coast, meeting with customers and partners, and they echoed my cautious optimism. As a group, we’re upbeat about a strong second half leading into 2010.

Given this perspective, the next question is: is Omni-ID ready? My answer is a resounding, “yes!” We’ve taken a number of key steps during the downturn to prepare for an upturn in the business. In a tribute to the strength of our technology and products, Omni-ID closed a sizeable Series C round of funding in February of this year – at a time when almost no companies were being funded. This investment has allowed us to strengthen our company in several significant ways:

Technology and Products

We have a roadmap of new RFID tags coming out over the next several months, including some significant product announcements coming in September. These new products are designed around value innovation – technological innovation that provides a leap in value for customers that opens up new market space for innovative companies like Omni-ID. I’ll talk more about value innovation in a future blog.

Capacity and Quality

Just recently, we announced our new manufacturing subsidiary, located in Quingdao, China. This facility will offer not only greater production capacity but also tighter control over the manufacturing process, resulting in continued quality improvements.

Partnerships and Programs

This past year, we announced some pretty significant partnerships with IBM and Mitsubishi, two highly-selective global powerhouses. Over the coming year, we look forward to developing those partnerships further as well as announcing new ones. Through these partnerships, we are part of total solution programs that address real world customer problems and bring more value to businesses.

Markets and Customers

As a startup, we’ve been focused to date on a few select markets, including IT asset tracking, where we are viewed as the leading passive UHF RFID company in this expanding market. We’re well-positioned and strong enough now to expand and aggressively enter new markets, where we believe our new product offerings provide innovation and value to customers.

With so many things ahead, the timing is perfect to begin an Omni-ID blog. As we roll out new products, partnerships and programs, my colleagues at Omni-ID, Stan Drobac and Andre Cote, and I will be sharing with you our personal thoughts on the industry and Omni-ID’s value innovation. We look forward to a continuing dialogue with you, our readers!