Inova Technology (OTCBB: INVA), an enterprise level information technology solutions provider specializing in RFID solutions, similar to companies like I.D. Systems Inc. (Nasdaq: IDSY) and Intermec Inc. (NYSE: IN), is well positioned to capitalize in the future through diversification as it is generating revenues from its Information Technology subsidiary, but poised for rapid growth with its smaller, but formidable RFID subsidiary.
With new uses being found almost daily for RFIDs (Radio Frequency Identification Devices), Las Vegas-based Inova Technology’s 2007 acquisition of Trakkers at the price of $5.89 million seems, in hindsight, to have been one of the decade’s most prescient moves by any of the myriad publicly traded tech companies. Trakkers, manufactures RFID readers and provides lead retrieval solutions for large trade shows. It’s sister company, RightTag also provides customized RFID tags.
Burgeoning Market
Everyone from private industry to government to hospitals has lately discovered the need for RFID systems to reduce operating costs, enhance security, and to track inventory and assets. Inova’s RightTag has already sold scanners to the Department of Defense (DOD), Northrop Grumman, and Honeywell. In a show of flexibility, RightTag also offers a custom design service which it’s already used to develop an RFID tag for contact lens manufacturer Gerber Coburn. The lens company needed a tag that was attachable to contact lens sheets during the stresses of production so the company could identify each sheet. They were also one of the first RFID developers to provide a Blue Tooth scanner.
The DOD now requires active RFID tags on each of its million-plus shipping containers whenever they’re moved outside the continental United States. Wal Mart uses RFID in its nearly 3000 stores to track pallets of warehoused goods, involving more than 25,000 reader systems. Even the biosciences have found a use for the devices: Bristol University researchers glued tiny RFID chips to ants to study their activities. In addition, the U.S. Department of State now issues passports with embedded RFID chips.
The devices have even found a major niche in hospital operating rooms as a way of avoiding the occasional, but potentially fatal, error of leaving a sponge or instrument inside a patient. A count of tagged sponges, gauze, and towels is logged into a scanner before and after surgery, and a scanning wand is waved over the patient on their way out of the operating room.
RFID Advantages Over Bar-Code Systems
What accounts for the growing popularity of commercial RFID systems over bar-coding is mainly a matter of cost. With bar-coding, each item must be in line-of-sight of a scanner and only one item can be scanned at a time. But RFID scanning does not require line-of-sight and can scan many items all at once. This results in direct cost savings during inventory and tracking because it saves time and reduces payroll costs. Some RFID systems also enable a quick check to see if an item is among the company’s warehoused assets, avoiding the time-consuming and costly process of sending an employee to search for it.
How It Works
Though there are different types of RFID systems, the most basic operates as a sort of ‘radio mirror’ device. An interrogator sends out a radio signal at a frequency matching the targeted tag. The tag then responds, or ‘wakes up’, and reflects that radio energy back to the interrogator along with information coded into the tag. Some tags are also battery-assisted to boost the signal for transmission over longer distances.
Encryption may also be used by an RFID system for security reasons to avoid unauthorized scanning. Without such encryption, someone might be able to steal passport information with a concealed scanner as passengers come and go from an airport terminal. In encrypted systems, both interrogator and tag have a program of rotating schema to defeat such attempts.
Inova Forges Ahead With Other Interests Too
Even though Inova’s RightTag operations are flourishing, the company continues to pursue its other core business of communications and electronic network development. Last Thursday it announced completion of “more than $1.4 million worth of network solutions” projects in the first quarter for 10 school districts in different parts of the country. In making the announcement, CEO Adam Radly commented that Inova “has also bid on numerous additional projects and we are expecting to be informed of the results of those bids during April 2011.”
With its solid IT base and RightTag among its assets, Inova stands ready to ride the wave of IT and RFID well into the future.