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From Factory to Foxhole, Aerospace and Defense Needs Give RFID a Huge Push, Says ABI Research

ABI Research | April 7, 2005

OYSTER BAY, N.Y.--(BUSINESS WIRE)--April 7, 2005--Most of the public attention given to RFID has focused on the retail supply chain, especially Wal-Mart's 2005 mandate to its top 100 suppliers. But the U.S. Department of Defense is also mandating its use in 2005 -- not to merely 100, but to all of its 43,000+ suppliers. Add to that the needs of the aerospace industry, particularly the two giant aircraft makers, Boeing and Airbus, and the shape of a massive vertical RFID market emerges.

A new study from ABI Research, "The RFID Aerospace and Defense Market," details how, when, where and who will be implicated by the RFID agendas and mandates within that market.

According to Erik Michielsen, ABI Research's director of RFID and ubiquitous networks, Boeing and Airbus -- which use many of the same components -- are working with the U.S. Federal Aviation Administration to formalize UHF RFID certification for systems to track aircraft parts. The hoped-for improvement in ROI is of vital importance to an industry that has been hard-hit by recent economic conditions. Safer planes and fewer procurement overlaps are added incentives.

"The airline industry is obviously profit-based," he says. "They want efficient manufacturing, supply chain and asset tracking systems to create economical business models. With the DOD, RFID is not about business models: it's about improving military operations efficiency in acquiring materiel from suppliers and making sure it gets to units in the field. These are massive, aggressive and very complex initiatives that will be major factors driving RFID's adoption."

The first beneficiaries are the RFID suppliers who have been granted "Blanket Purchase Agreement" awards, certifying that their systems meet the DOD's requirements. The first five companies in this favored position are UHF EPC Class 1 transponder suppliers Alien Technologies, Avery Dennison, CDO Technologies, Lowry Computer Products and Intermec. Other BPA awards are expected soon.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the Web at www.abiresearch.com , or by calling 516.624.2500.

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