Newsletter - Identec Solutions

The United States Government is the world’s largest consumer and promoter of active RFID solutions, accounting for over 20% of the US$550M world-wide active RFID deployments annually. In order to be able to service this large and growing customer, and to be able to enter intermodal and similar markets where global standards are key drivers, IDENTEC SOLUTIONS has embarked on a two-pronged standards strategy.

In the first place, IDENTEC SOLUTIONS has been working with the ISO Committee to develop a new Active RFID Standard that will be able to take advantage of the power of ILR technology operating at the 868-915 MHz frequency. For functionality, performance and value, ILR is still the most advanced active RFID system on the market, and being able to offer it as a standard will result in less risk and faster adoption by our customers.

Secondly, IDENTEC SOLUTIONS has entered into a licensing agreement with Savi Technology, Inc., a Lockheed Martin Company (www.savi.com) to license its ISO 18000-7 RAND off-air standard. This is the dominant protocol used by the US Department of Defense, and IDENTEC SOLUTIONS will incorporate the protocol as an available feature in its next generation of ILR tags and readers. Impeva Labs, Hi-G-Tek, Evigia Systems, Graphic Industries, Apogee Total Solutions, and Convergence Systems are the other companies that are participating in the licensing program.






	January 2007

1. FOCUS	Message from the CEO Intermodal Transport goes IDENTEC SOLUTIONS Commitment to Open Standards OIS-P Continues to Shine ACTIVE RFID Continues to Gain Momentum IDENTEC SOLUTIONS Launches New Website

2. TRADE SHOWS	Events and Tradeshows

3. PRODUCT NEWS	A Star-Studded Addition: ILR Visibility Suite



1. FOCUS g Message from the CEO 2006 was an exceptionally successful year for IDENTEC SOLUTIONS. The relocation of the North American head office to Dallas, Texas, is now officially complete. In addition to being a hub for the RFID industry, the central time zone, and improved access to international and domestic flights, this location has allowed us the opportunity to better access and service our growing customer base. The Company undertook a number of major strategic initiatives to further its goals of becoming the recognized leader in long-range active RFID. With the purchase of Baumer Ident, IDENTEC SOLUTIONS further expanded its reach into the industrial manufacturing market. Complementing technology and vertical market similarities made the transition a natural one. In addition, the company recently agreed to license the 18000-7 RAND standard as part of our initiative to make significant inroads in intermodal shipping as well as Aerospace and Defense. Other announcements this year included global recognition for our superior RFID product line by Frost & Sullivan, significant financing, the launch of exciting new products, and new partnership agreements. More information on many of these important announcements is contained within this newsletter. As we consider the year that lies ahead, 2007 promises to build further on the momentum of this past year in terms of both corporate and market growth. I look forward to sharing many more exciting new announcements in the months that follow. Best regards, Gerhard Schedler Vorstand/CEO
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g Intermodal Transport goes IDENTEC SOLUTIONS Together with Horizon Lines (www.horizonlines.com), IDENTEC SOLUTIONS established the ocean container shipping industry's first fully-functional intermodal RFID solution, providing Horizon’s customers with real-time shipment visibility during all phases of transit. Horizon Lines is in the process of tagging its entire fleet of containers serving the Alaskan trade lane. The program also includes the installation of RFID readers at distribution centers, terminals, and key Alaska highway routes. Customer adoption in the Alaska trade lane may lead to additional deployments at Hawaii and Puerto Rico. Safeway (www.safeway.com), the leading grocery retailer in the Alaskan market, has joined this effort by participating in a pilot testing program—currently underway—with the new RFID-enabled visibility solution, to monitor shipments from its Pacific Northwest distribution centers to stores across Alaska.
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g Commitment to Open Standards The United States Government is the world’s largest consumer and promoter of active RFID solutions, accounting for over 20% of the US$550M world-wide active RFID deployments annually. In order to be able to service this large and growing customer, and to be able to enter intermodal and similar markets where global standards are key drivers, IDENTEC SOLUTIONS has embarked on a two-pronged standards strategy. In the first place, IDENTEC SOLUTIONS has been working with the ISO Committee to develop a new Active RFID Standard that will be able to take advantage of the power of ILR technology operating at the 868-915 MHz frequency. For functionality, performance and value, ILR is still the most advanced active RFID system on the market, and being able to offer it as a standard will result in less risk and faster adoption by our customers. Secondly, IDENTEC SOLUTIONS has entered into a licensing agreement with Savi Technology, Inc., a Lockheed Martin Company (www.savi.com) to license its ISO 18000-7 RAND off-air standard. This is the dominant protocol used by the US Department of Defense, and IDENTEC SOLUTIONS will incorporate the protocol as an available feature in its next generation of ILR tags and readers. Impeva Labs, Hi-G-Tek, Evigia Systems, Graphic Industries, Apogee Total Solutions, and Convergence Systems are the other companies that are participating in the licensing program.
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g OIS-P Continues to Shine IDENTEC SOLUTIONS GERMANY GmbH, formerly Baumer IDENT, continues to make impressive strides, especially with the highly robust OIS-P system. AUDI recently announced it will deploy OIS-P in the Audi TT production line. They will deploy additional systems in 2007 for other AUDI production facilities. In total this will exceed 1 Million EURO in new business for IDENTEC SOLUTIONS. Stay tuned as in the first quarter of 2007, OIS-P will be officially launched for the US market amid much fanfare.
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g ACTIVE RFID Continues to Gain Momentum ACTIVE RFID continues to be the fastest growing automatic ID sector and the bright spot in the RFID market generally. Independent industry analysts forecast sales of active RFID systems to increase to $6.8 billion by 2016 from $550 million in 2006, a compound annual growth rate of 29%. In addition to new companies entering the field, the market is also consolidating. Recently, one of our major competitors—Wherenet Corp.—was acquired by Zebra Technologies Corporation (NASDAQ: ZBRA) for US$126M in cash. Last year SAVI Technologies was acquired by Lockheed Martin for US$400M. These and other recent transactions show the significant value that major corporations and the financial community place in this exciting market. As evidenced by our recent acquisition of Baumer IDENT and our continuing corporate development efforts, IDENTEC SOLUTIONS is committed to being a driver in this market and will continue to pursue any M&A opportunities that will support our strategic goals.
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g IDENTEC SOLUTIONS Launches New Website IDENTEC SOLUTIONS has recently launched its newly designed website. In addition to being easier to navigate and more attractive and user-friendly from a design perspective, the new site fully integrates ILR and OIS solutions and more clearly outlines the strengths and global market focus of the company. The site is a prelude to the new corporate design philosophy and clearly positions IDENTEC SOLUTIONS as the leader in our market. Come See the World of IDENTEC SOLUTIONS at www.identecsolutions.com.
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2. TRADE SHOWS g Events and Tradeshows IDENTEC SOLUTIONS will be presenting and exhibiting in a variety of global events. We invite you to visit us over the next few months at the following events. European Events Transponder Roadshow, March 8, Karlsruhe, Germany CeBIT 2007, March 15-21, Hannover, Germany Transponder Roadshow, April 26, Cologne, Germany PulPaper, June 5-07, Helsinki, Finland Transponder Roadshow, June 14, Linz, Austria RFID Journal LIVE! Europe, Nov. 06-08, Amsterdam, Holland ID World, Nov. 26-28, Milan, Italy North and South American Events The Rental Show, Feb. 7-10, Atlanta, GA APTA TransITech Conference, Feb. 13-15, New Orleans, LA RFID World, Mar. 26-28 Dallas, TX RFID Summit, April 3-4, Washington, DC SAE, April 16-19, Detroit, MI RFID Journal Live!, April 30 - May 2, Orlando, FL ICUEE, Oct. 16-18, Louisville, KY Council of Supply Chain, Oct. 21-24, Philadelphia, PA Asian Events RFID World Asia, April 24-27, Singapore
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3. PRODUCT NEWS g A Star-Studded Addition: ILR Visibility Suite A proud new addition to the IDENTEC SOLUTIONS product family is the new software tool ILR Visibility Suite. IDENTEC SOLUTIONS is launching a beta version of Visibility Suite mid February. The web-based productivity tool was developed to help customers better manage and optimize their manufacturing processes, assets and associated resources. Available as a client server solution or as a hosted service, ILR Visibility Suite works completely in the background and provides our customers with a complete set of tools and reports that can be accessed from any computer with an Internet connection. Additionally, the software can issue automatic updates and alerts, and even control other equipment based on user-definable conditions and issues. Among its many features, the ILR Visibility Suite allows the user to: • automatically record transactions • easily track and monitor production through the entire process • effortlessly search for devices based on status • identify quality issues • track articles and production lots • maintain accountability • monitor bottlenecks and inefficiencies This powerful software tool together with our ILR technology allows us to provide the entire solution to our customers without having to rely on external or customer engineering resources. This will reduce the sales cycle and allow customers to drive significantly more benefit, faster.
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