Sensormatic and Intermec announce stategic alliance to produce RFID smartEAS systems.

August '99 Asset Management, EAS, RFID

Sensormatic Electronics and Intermec Technologies, a UNOVA company, have announced an agreement in which the two companies will develop integrated electronic security and radio frequency identification (RFID) systems. The new products will be based on Intermec's Intellitag 500 RFID and Sensormatic's Acousto-magnetic electronic article surveillance (EAS) technologies, and will be marketed under the brand name smartEAS. Software applications for these systems will be developed for retail, consumer goods manufacturing, distribution, and commercial/industrial customers.

Two technologies in one tag

The Intermec Intellitag 500 microchip technology was originally developed at IBM's internationally acclaimed T.J. Watson Research Center, and was acquired by UNOVA in December of 1997. UNOVA has since invested tens of millions of dollars into this exceptional RFID technology. The Acousto-magnetic-based UltraMax tag, the fastest growing EAS technology in the world, was developed as a result of advances in materials research. Sensormatic acquired control of this technology in 1988 and has continued to develop it for the retail EAS market.

Working together, the two companies will be incorporating RFID and EAS into one tag, producing a comprehensive RFID product combined with the proven loss prevention advantage of Ultra˙Max EAS.

The agreement gives Sensormatic exclusive rights to combine its EAS systems with Intermec's Intellitag 500 RFID technology for distribution into worldwide retail operations, including their affiliated warehouses and distribution centres. In non-retail operations, both companies will market smartEAS through their respective sales and distribution channels.

The smartEAS system - a smooth transition

SensorID, a new product company within Sensormatic, is working with Intermec's Amtech division to develop smartEAS systems, which will include smartEAS tags, readers (fixed and handheld), detachers and deactivators. Links to current information management systems via software applications supplied by SensorID will complete the smartEAS systems.

smartEAS tags will contain the same EAS component found in the current UltraMax label, which will trigger an alarm from existing UltraMax pedestals installed in any retail store. This will be cost effective because the retailer can continue to use low-cost EAS-only labels on goods that would not justify RFID applications at first.

As a retailer begins to use the smartEAS system, new combination bar code/RFID readers will be installed at the point of sale and/or in the store's receiving area. This new equipment will be capable of reading bar codes as well as reading and writing information to the RFID component of the tag. smartEAS software will interface with the user's information management system. The retailer, distributor, or manufacturer will gain additional benefits from the tags as they expand on the applications that will be available with a smartEAS system.

Multiple utility and recycling increase return on investment

At product launch, the prices for smartEAS tags are projected to range from R6 ($1) for an UltraMax ID label with read-only applications up to R15 ($2.50) in SuperTag ID form. Prices are expected to decrease as sales volume increases.

According to company executives, there are two important factors that will influence the initial return on investment for manufacturers, distributors, and retailers.

p Recycling - SensorID has developed several unique designs, which will allow smartEAS tags to be removed at the point of sale and then recycled for application onto new items. The multiple read/write tags can be re-programmed any number of times. This method of use can reduce the tag burden to only a few cents per item, thus improving the ROI. The only disadvantage of recycling is the loss of benefits associated with applications for electronic receipts.

p Multiple utility - Once the smartEAS tag has been applied to a product, manufacturers, distributors, and retailers can use the same tag for various applications. Each added utility provides increased value and improves the return on investment.

What's next - time lines

SensorID has identified early adopters who will be involved in pilot tests throughout 1999. Within six to nine months, smartEAS will move to live store beta testing, discussions on these tests cited to take place soon with prospective partners. Full commercial launch of smartEAS is projected for late 2000.

For details contact Sensormatic SA on tel: (011) 466 0444, Cape Town (021) 559 4425, Durban (031) 702 8206, East London (043) 721 0290 or Port Elizabeth (041) 365 0747.

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