IBM sets up shop to test radio tags

LAS VEGAS--IBM said Wednesday that it is building a testing facility designed to allow companies to check the accuracy of gear that employs controversial RFID tags.

The Gaithersburg, Md., facility will build on experience IBM gained during a six-week project Wal-Mart Stores led. Wal-Mart has been one of the biggest proponents of radio frequency identification, or RFID, technology, mandating that its top 100 suppliers include the tags by the end of next year on all goods shipped to one key distribution facility and on goods sent to all locations by Jan. 1, 2006. Sources say the retail giant is spending $3 billion on the RFID effort.

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The testing in the Wal-Mart project was designed to help suppliers of both goods and technology get a handle on what they need to do to meet the deadlines. Through that effort, IBM said it learned a number of key lessons about what works and what doesn't. For example, the tags on individual cases of facial tissue can be read from outside a pallet, but case-level tags don't work with a pallet of liquid goods, like paint.

The company also learned that the size and type of antenna, size and shape of the tag, along with other characteristics play a big role in how easily tags will be read, said Jim Reynolds, a national principal at IBM Global Services.

As a result, IBM is setting up the Gaithersburg center as a place all companies can send their RFID-equipped gear for critical testing before moving RFID systems into their day-to-day operations, Reynolds said on a panel at the Comdex trade show here Wednesday.

"Testing is huge," Reynolds said. "If you don't test, you will fail. End of story."

RFID has been at the center of a number of technology debates, many of which are centered on privacy concerns. However, Microsoft executive Jeff Raikes cited the promise of RFID in a panel earlier this week as part of his argument of why technology still matters to businesses.

Those on Wednesday's panel said that like it or not, the technology will become ubiquitous because of the economic benefits it can offer, such as reducing theft and streamlining supply chains.

"At some point, every asset worth managing is going to be able to identify itself at some level," said Dan Doles, CEO of wireless company WhereNet. "It's inevitable. The only question is the time frame."

Cost is still an issue, said panelist Matt Ream, senior manager of RFID systems for bar code specialist Zebra Technologies. Today, depending on volume, customers can expect to pay 30 cents to $1 per radio tag.

"Those prices are continuing to come down," Ream said, adding that it is not clear just how far they will drop. "Could they hit 10 to 15 cents (apiece)? Possibly."