- AMSTERDAM (Reuters) - U.S.
computer giant International Business Machines Corp and Dutch electronics
maker Philips said on Monday they would work together to sell radio tags
that would displace barcodes.
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- Philips' semiconductor unit will make the tiny radio
chips that can be stuck on items from clothes to bottles of milk, while
IBM will provide the computer services and systems.
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- No financial details were disclosed.
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- By using so-called radio frequency identification (RFID)
chips, manufacturing companies and retailers will be able to track closely
their inventories.
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- At a later stage it could also help consumers, for instance
when a washing machine will be able to recognize that a bright color piece
of clothing has been put in the white wash. RFID chips, which in a few
years time are likely to cost a few cents or even less, are thin and small
and send essential bits of information about a product to a receiver that
can read the signals. The data could include a product description, packaging
and expiry dates, color and price. It is a more advanced way to track and
describe goods than barcodes, which are now used for most products and
inventory systems.
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- The market opportunity of RFID tags is estimated at $3.1
billion by 2008, according to research group Applied Business Intelligence.
Another research group, IDC, estimates that retail demand alone will be
$1.3 billion within four years.
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- Philips said it would be its own customer when later
this year it tags wafer cases and carton packages at its semiconductors
Kao Hsiung manufacturing site in Taiwan and the division's distribution
center in Hong Kong.
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- Research groups estimate that some $40 billion of excess
inventory of consumer goods and retail items are in the supply chain at
any given time. The tags could help reduce theft and inventory levels by
25 percent, they said.
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