Radio Waves Could Turn Bar Codes Into Has Beens

First there were price tags. Then there were bar codes. Now come radio frequency identification tags, which send messages to a handheld reader when activated by low-power radio waves.

Why are RFIDs better? For one, the tags need not be visible for readers to pick up their signals. So workers don't have to wrangle boxes quite so much. In addition, RFIDs hold more data than bar codes and can be reprogrammed by scanning devices. That means more accurate information about what's on hand and where it is. Put it all together, and RFIDs spell big savings in material handling costs.

Until now, RFIDs have been too expensive for most goods. Now Motorola Inc. (MOT), working with packaging-materials maker International Paper (IP), is rolling out a low-cost RFID tag that could extend the technology into new markets. Motorola's BiStatix system, due in early 2001, uses a tiny silicon chip connected to an antenna made of conductive ink. The antenna is printed onto the object. So the RFID unit can be integrated easily into paper and packaging materials, which should lower per unit costs to as little as 10 cents.

RFIDs won't entirely replace bar codes anytime soon, says Grant B. Milner, BiStatix' director of business operations. "Our greatest opportunities would be in high-value items rather than cereal boxes." But Motorola foresees a time when the price could fall to a few cents per tag, making it possible to put them wherever a bar code is now.

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