SAN JOSE, Calif. — A startup nurtured as part of Intel Capital has announced a low-cost integrated RFID reader chip for the UHF band. The sub-$40 cost, 8x8mm size and 1.5W power consumption of the R1000 chip could enable a new class of portable readers, but it's unclear whether the long anticipated ramp of this sector will be based on UHF devices, analysts said.
Radio frequency identification tags, now used on containers and pallets, ultimately are expected to replace bar codes used on individual retail items, creating a market explosion for RFID. However, today's UHF products lack the accuracy to read tightly stacked tags in a box or pallet, opening a door to low and high frequency tags or some hybrid yet to be developed.
"We think RFID could take off in 2009 or 2010, but it's not clear if that is with HF or some hybrid HF and UHF," said Drew Nathanson, director of RFID research at Venture Development Corp. (VDC; Natick, Mass.).
"All RFID users want one product based on one frequency, not multiple products and frequencies--and there is a lot of investment money going in to developing UHF right now," Nathanson said.
"There is an evolution taking place, but whether it will lead to something based on HF or UHF is not clear," agreed Jonathan Collins, an analyst in London with ABI Research.
UHF products operate in the 860-960 MHz band and can read as many as 1,000 tags/second over distances up to 10 meters. That compares to HF products that have much slower data rates and require readers within a foot of the tags.
"Many apps need the UHF performance because they are working with fast conveyor belts or large pallets of 70 products or so traveling on a truck at 5-8 MPH," said Kerry Krause, marketing director for the RFID group at Intel.
Intel's R1000 "is significant" because "the attention has all been on tag pricing and the readers have been left out of the equation," said Collins of ABI. "The cost of these systems is a big thing," he added.
"The chip is addressing what we think could be one of the hottest markets in RFID," said Nathanson.
Existing RFID players such as NXP, STMicroelectronics and Texas Instruments sell HF tags and readers and UHF tags. However, they have not yet entered into the less profitable market for UHF reader chips and are not expected to roll such products for some time.
Today's market for UHF reader systems is still tiny. Only 50,000 UHF-based readers shipped in 2006.That could grow to about 75,000 this year, according to VDC.
Today's UHF readers are relatively large—the size of a Tablet PC or corporate wired phone—and cost as much as $2,000 due in part to a bill of materials of as much as $200 for transceiver modules made from more than a hundred discretes. Using the new Intel chip, readers could cost as little as $500 and have a form factor of a large PCMCIA card, Nathanson said.
The Intel R1000 dissipates 1.5W maximum, compared to tens of Watts for discrete-based modules. The lower power ratings mean the R1000 can enable handheld peripherals that draw their power from a 2.5W USB connection to a notebook computer.
