Lessons from RFID Acquisitions and Fund Raising
2006年9月11日 Dr Peter Harrop
So far, the main reasons for RFID acquisitions are
- Outsiders leveraging their non-RFID capability
- Those early in the RFID value chain pulling through their product by buying more prosperous "late in the chain" system integrators etc
- In filling gaps in capability
- Creating critical mass often in a "key vertical" application
41% of the 34 RFID-related acquisitions that we have examined involve companies purchased in the US - far more than any other country. However, interestingly, there are more acquisitions made by companies from outside the US than in the US so far, the opposite of the situation with fund raising. The number of acquirors of RFID companies is increasing and their motives are increasingly varied. Many are entering the RFID business for the first time through acquisition.
Scope for many more acquisitions and investments
In RFID, the amount of acquisition activity is picking up fast but is still well below what the market demands. With about 1000 companies doing something significant in the RFID value chain and mergers being less than the rate of formation of new RFID companies, there is scope for much more M&A activity and for the weak to disappear.
Concentration on systems now
There is a clear pattern in the RFID acquisitions made since 2000 that we have examined.
The table shows an analysis by position in the value chain
|Chip design||Tags or e-passports||Readers/|
|Software/ Services||Distribution||System integration/|
Systems suppliers and system integrators are increasingly favoured because they are landing the bigger orders and are more likely to be profitable because they suffer less competition. For example, system integrator Xterprise even claims to be profitable in the sector with the largest and most prevalent losses for suppliers - tagging pallets and cases for consumer goods companies. However, it would be dangerous to assume that this bias will last forever.
Major new interest in active RFID
Earlier acquisitions have shown some bias to companies making tags or parts of tags but that is less evident recently. The tag makers that were purchased earlier have been subsumed into "soup to nuts" system supply in the main. By contrast, there is now a strong trend towards active RFID. IDTechEx market research shows that 20% of the money spent on RFID in 2006 involves active RFID but 24% of the fund raising and acquisition that we have examined involves active RFID. This is rational given that 26% of the money spent on RFID in 2016 will be on active RFID according to research by IDTechEx. That is a trend that is also evident in the evolution of the IDTechEx RFID Knowledgebase of nearly 2100 case studies of RFID in 81 countries, about 60 new studies being added every month. Active RFID is of particular interest in the form of Real Time Locating Systems RTLS.