During 2006 look for more strategic investments like this one by large companies in smaller startups, as this report notes:

"ThingMagic, a privately held RFID products specialist, said Wednesday it has received additional funding from Cisco Systems and Nicholas Negroponte, the chairman of MIT's Media Laboratories.

The company did not disclose how much Cisco and Mr. Negroponte invested individually but said the total investment, which also included a line of credit from Silicon Valley Bank, was $6 million.

The company has already raised $15 million beginning in July 2005, bringing its total investment through three rounds to $21 million. Other investors in the Cambridge, Massachusetts-based company include the Tudor Group, the Exxel Group, Inventec Appliances, Morningside Technology Ventures, and Top Line Capital LLC.

'We have been working with Cisco to make sure our systems integrate into the corporate network, so the Cisco investment is a good fit,' said ThingMagic CEO Tom Grant. 'Cisco recognizes that RFID will become an important part of maintaining and understanding the flow of the supply chain.' "

Note also what ThingMagic's CEO said about timing for RFID technology to reach wider adoption:

"'We built the company through the first five years, but we decided we wanted to step up our operations, so we took our first funding just last year,' said Mr. Grant. 'We avoided the capital markets because we thought the technology would take some time. We believe that we are now in the three- to five-year horizon where we can see the inflection point.' "

Quoted from Red Herring.

ThingMagic is a manufacturer of RFID reader products. With Cisco's footprint in networking at the enterprise level as well as its wireless expertise, it is not hard to see where this strategic combination will lead.

In particular, the combination of wireless and RFID has heated up recently, and I look for 2006 to bring more interesting developments on that front.