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Symbol buys RFID rival Matrics

Consolidation begins in the simmering RFID gear market, as Symbol snaps up a leading vendor of radio tags and fixed readers.

RFID tools vendor Symbol Technologies reported on Tuesday that it has agreed to buy rival radio tag specialist Matrics for $230 million in cash.

The deal marries two vendors that have been pushing hard to become leading hardware providers in the nascent radio frequency identification space. RFID technology combines chips armed with wireless antennas together with other IT systems to provide detailed information about products to which the devices are attached. In certain scenarios, they're not unlike pumped-up, wireless bar codes.

The technology has developed rapidly over the last year, after mandates to employ RFID were handed down from several major retailers, including Wal-Mart Stores and Target, to their suppliers.

Through the acquisition, Symbol significantly adds to the array of products it will bring to the burgeoning market by augmenting its existing line of handheld radio tag scanners with Matrics' fixed-location readers and RFID chips, along with the devices' underlying software. According to Symbol executives, the buyout of Rockville, Md.-based Matrics was meant to give the company the ability to offer a comprehensive RFID package.

"Customers are already becoming frustrated with the multiple technologies from multiple vendors approach used in the market today, and most are only conducting field trials," said Todd Hewlin, senior vice president of global products at Symbol. "Once businesses begin looking to adopt RFID systems for the long term, they will want an integrated system, and the addition of Matrics' technology truly gives us the opportunity to offer that."

Hewlin said Holtsville, N.Y.-based Symbol viewed Matrics as the vendor with the best fixed-RFID readers--devices used to scan the chips that can be mounted on everything from loading dock doors to trucks--on the market. The executive said his company believes the first wave of RFID adoption will favor fixed readers over the sexier handheld devices it has been developing, a realization that helped spur the acquisition. Matrics has also been featured in high-profile RFID tests outside the retail industry, including work on radio tag-based luggage tracking systems already in place at several airports, including Hong Kong International Airport.

The two companies were already working together on a proposal for RFID hardware standards, dubbed "Freedom Project," which is currently under review by Brussels-based industry group EPCglobal. The companies' proposition, which also includes work from several other vendors, including Atmel, is one of three guidelines the standards body plans to choose from in defining its RFID hardware standard, which is due out in early October, 2004.

One area where the companies agreed was in addressing older technologies with the pending EPC standard. Both vendors back the idea of creating a set of guidelines, which will be known as RFID Generation 2, that works with existing RFID and bar code technologies, as well as new tools.

"The bar code isn't going anywhere, while RFID is still growing," Hewlin said. "Customers want a multimode data capture system to deal with both."