The technology promises efficiency for manufacturers and convenience for shoppers--but potentially also headaches for those concerned about privacy.
McNealy and his colleagues at Sun have eagerly anticipated the day when everything with a "digital heartbeat"--cell phones, cars, microwave ovens--is attached to the Internet. Sun hopes to supply the mammoth servers that will process all the information produced by these devices.
"I used to talk about everything with a digital or electric heartbeat" being connected to the Internet, McNealy told financial analysts in a speech here Thursday. "Now I'm talking about tomato cans, and I'm not making it up anymore," he quipped.
Sun has joined the Auto-ID program at the Massachusetts Institute of Technology, funded by Procter & Gamble, Gillette, Wal-Mart, Unilever, Tesco, Target and other corporations.
"You put stuff in a grocery basket and just drive by (a detector)," McNealy said, describing the idea. The detector reads what's in the basket, charges a person's credit card and "tells the factory to restock the shelves," McNealy said.
The goal of the Auto-ID program is to keep store shelves full, said Gillette spokesman Steve Brayton. On any given afternoon, 8 percent of the items that U.S. shoppers are looking for are out of stock, he said. On Sunday, it goes up to 11 percent.
In addition, the technology could help curb theft, Brayton said.
Wal-Mart is trying out the technology in a pilot project in Tulsa, Okla.
"We think within two to three years you'll find some early adopters among retail and manufacturing businesses," Brayton said. "We're looking at five to 10 years to widespread use."
But building transponders into every sort of product could spark privacy concerns, said David Holtzman, an Internet security researcher and former Network Solutions chief technology officer.
People might not be comfortable walking around with items that identify themselves as medication, condoms or pornography. They also might not be comfortable with manufacturers tracking where products go after being purchased.
And "if legislators mandate mandatory tagging of things like firearms or ammunition, we could get both the left and right wing pissed off," Holtzman said.
Keeping store shelves stocked or easing checkout isn't a big deal, Holtzman said. But combining that product information with data about the individuals buying those products could raise hackles.
"Any one piece of information"--cell phone records, purchasing records, car location--"is not that damning or intrusive. But if you put them together, you've got my life," Holtzman said. "It's very hard to hide things when you have that level of analysis."
Even if these uses aren't what retailers and manufacturers have in mind, technology has a way of creeping into other domains, Holtzman added. Transponders for driving through electronic tollbooths started as a convenience to drivers but now are used in combination with timing analysis to send out speeding tickets, for example.
How it's done
Auto-ID uses passive tags that respond to a specific radio signal. A tiny capacitor on the chip stores enough energy from the incoming signal to send out a response. The tags only respond when near a special reader device.
The tags also have a miniature chip and enough memory to keep track of a digital identity. The memory is 96 bits long, tiny by computer standards but it provides a huge number of combinations of ones and zeros.
The technology is set up to identify more than 268 million manufacturers with more than a million individual products each, an Auto-ID representative said.
The memory stores an electronic product code, or EPC, which is linked with an Internet service called the Object Naming Service (ONS) that keeps track of data for every EPC-labeled object. Researchers also are working on a pared-down 64-bit version of EPC.
But the system is limited by the cost of making the tags, not to mention installing the infrastructure to monitor the tags and process the information.
With existing technology, tags cost about 50 cents. That's not much additional expense for a $1,000 computer, but it is for a $3.50 bottle of shampoo.
Gillette expects the investment to pay off in the long run, though, and Auto-ID researchers are examining ways to bring the cost of tags down to a nickel apiece.
"The researchers of the Auto-ID Center believe the goal of the 5 cent tag is difficult but achievable," research director Sanjay Sarma wrote in a February paper that describes a plan to build a low-cost prototype in a year.