Interested in predicting where the next mergers and acquisitions will happen in the RFID space? Or perhaps considering some M&A activity of your own? Or maybe you just want to clarify your company's RFID strategy?

IdTechEx has an interesting white paper analyzing the RFID landscape.

The premise of the paper is that the RFID money is not in the hardware side, but, rather, in services. It predicts that the smart companies will understand this and that hardware providers and the systems integrators will align themselves. Here is an extract from the paper:

"The RFID value chain is shown [above]. On the left, the chipmakers and material suppliers sell their goods to all comers. This is called horizontal marketing. For example, all the chipmakers are famous companies selling integrated circuits for many purposes and their RFID chips are only a small part of their business. The economics of chip factories and the very similar nature of RFID and non RFID chips dictates this.

On the right, in Classical fashion, the systems providers, integrators and operators and so on specialise in certain applicational sectors such as Savi Technology in military, Trenstar in beer kegs and TransCore in non-stop road tolling. In between, we have companies feeling their way in this immature business and trying various combinations of hardware, software and other options, neither fully positioned vertically nor horizontally.

Again, in classical fashion, the big RFID orders have always been in system provision, integration and/or facilities management, such as the $111 million order Savi landed from the US Military five years ago and several for tens of millions of dollars since. Other examples are the $1.6 billion order for card systems for travel on London's buses and trains in the UK, involving 17 years' facilities management. The consortium Transys landed that one. Then there is the $6 billion national identification card system for China that is being installed by a small number of Chinese companies.

What all this tells us is that, like barcodes and other disposable artefacts, making the artefact or interrogatory hardware is not a good end point if you have grand ambitions. The big money is in system supply, integration and management."

You can download the white paper as a Word doc here (and also see a bigger view of the graphic above). I understand the white paper is an extract from a larger report entitled "RFID Forecasts, Players & Opportunities 2005-2015."