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   Technology StocksRFID, NFC and QR code Technologies

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From: Glenn Petersen9/20/2016 9:14:04 AM
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When Information Storage Gets Under Your Skin

Tiny implants can replace keys, store business cards and medical data—and eventually a lot more

By Nina Adam and William Wilkes
The Wall Street Journal
Sept. 18, 2016 10:11 p.m. ET

Patrick Paumen doesn’t have to worry about forgetting his keys and being locked out of his apartment. That is because he doesn’t need a key anymore—he simply unlocks the door with a wave of his hand.

The 32-year-old IT expert from the Dutch city of Heerlen is one of a growing number of people with electronic implants under their skin, mostly to use as keys or for identification.

Mr. Paumen has several such implants, or tags, embedded in the fatty tissue of his hands and his lower arm. He uses separate tags to unlock not only his apartment door, but also his office and the gate to a secure parking lot at work. Another stores information he would otherwise put on a business card—name and contact details—and yet another holds similar information for nonbusiness encounters.

The implants can be activated and scanned by readers that use radio frequency identification technology, or RFID. Those include ordinary smartphones and readers already installed in office buildings to allow entrance with a common ID card.

Mr. Paumen says the tiny devices simplify his life. When nearing the secure office parking lot, he says, “I just roll down the window, stick my arm out and let the reader at the gates scan the implant, which is just below my little finger. I don’t have to worry about losing my access card.”

Done in secondsThere is no comprehensive data on how many people have RFID implants in their bodies, but retailers estimate the total is 30,000 to 50,000 people globally.

The fact that the tags can’t be lost is one attraction. Another, users say, is that the tags don’t operate under their own power but rather are activated when they’re read by a scanner. That means they can never be rendered useless by a dead battery like smartphones.

It only takes a few seconds to inject the small glass cylinder containing a tag, the size of a grain of rice, under the skin. It can be done by anyone, but proponents say it is best done by a trained person with sterilized equipment to lower the risk of infection.

Once a tag is implanted, there can be an adjustment period: “They can move a little bit depending on skin type and activities,” says Quentin Inglis, owner of the Kalima Emporium, a tattoo and piercing studio in Worthing, England, who has implanted tags for several customers. Mr. Inglis keeps his business card on an implanted tag. “I do a lot of climbing, so mine moved around a bit until it found a position it was happiest with,” he says.

Medical potentialImplanted tags have a demonstrated potential for use in travel. Andreas Sjöström, the head of digital solutions at Sogeti, a technology consulting unit of Capgemini Group, used an implanted tag loaded with information identifying him as a Scandinavian Airlines customer to board an SAS flight from Stockholm to Paris for the first time in December, and has since used the tag several times for SAS flights. The tag contains the same information some SAS passengers normally have on a sticker used for the same purpose, and is read by the same scanner the airline uses for those stickers.

Electronic RFID tags that go under the skin are being used to store personal information and give users access to secure areas. Photo: Henrik Andree/Telefónica BASECAMP/

Some people list emergency contacts on an implanted tag. And others see potential for the use of the tags in medicine, though one big challenge needs to be addressed for those visions to become reality: Medical personnel or anyone else trying to help someone in a medical or emergency situation will need to have some way to know that the person they’re trying to help has potentially lifesaving information available under his or her skin.

For instance, Kevin Warwick, deputy vice chancellor at Coventry University in England and an expert in cybernetics, says that people who suffer from epilepsy often wear pendants that identify them as having epilepsy and sometimes provide emergency contacts and some basic information on how to help a person having a seizure. But the pendant can be lost or forgotten—a tag cannot. Paramedics and other first responders could be trained to check for tags, he says, and perhaps people with epilepsy could have a small tattoo or some other marker to help other people find the tag.

Another idea for medical use: “In hospitals, you could have a small thing implanted to make sure this is the right patient or person for this operation, to reduce the number of errors there are in medical operations,” Dr. Warwick says.

The tags also can be used to access medical records. Information stored on a tag can easily be updated with the tag remaining in place.

Advocates also hope it won’t be long before the implants will allow them to make payments in cafes or shops, the way smart cards are used. Mr. Sjöström says the technology is capable of enabling such transactions, if software standards are developed to allow them. Data security is also an issue here, he says, as the current generation of implants isn’t capable of the same level of encryption as existing electronic payment systems.

Ethical issuesSkeptics point to ethical concerns that will have to be addressed before tag implants become more common. While there may be no issue with implanting a tag under the skin of consenting adults, things could become tricky if a person doesn’t want it or isn't in control of the tag’s content.

For instance, the use of a tag “is ethically straightforward and even useful” for people who can’t grip a key because of extreme arthritis or the loss of a hand, says Arianne Shahvisi, a lecturer in ethics at the Brighton and Sussex Medical School in the U.K. But while tags also could be used by people with dementia to carry identifying information and to ensure that they would never lose their keys, it would be “troubling” in such cases because the patient may not be able to give proper consent to the procedure.

Privacy concerns will also have to be addressed before tag implants can reach their full potential. Although people promoting them say the implants currently on sale can only be picked up by readers in very close range, some people worry that strangers could still tap their personal information without their knowledge or consent.

And while many adults are repelled by the idea of manipulating a perfectly healthy body, young people may accept it as they do most technology surrounding them. Take Patrick and Birthe Kramer, a couple in Hamburg, Germany, who have implants that unlock the door to their home. Their 2-year-old son, whose body remains chip free, already imitates his parents by trying to open the front door with a swish of his hand.

Ms. Adam and Mr. Wilkes are Wall Street Journal reporters in Frankfurt. They can be reached at and

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From: Glenn Petersen12/8/2016 10:51:04 AM
   of 1712
Amazon's new grocery store could be driving up the price of a $600 million company (Impinj)


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From: Glenn Petersen3/25/2017 9:11:59 AM
   of 1712
Impinj the ‘Best Way to Play’ the ‘Tipping Point’ in RFID, says Morgan Stanley

By Tiernan Ray
February 23, 2017, 11:45 A.M. ET

Shares of Internet of Things technology maker Impinj ( PI) are up $1.45, or 5%, at $29.94, after Morgan Stanley’s Craig Hettenbach and Joseph Moore today offer up a team effort, initiating the stock at Overweight, with a $40 price target, writing that it is the “best way to play” what they see as a “tipping point,” in so-called “radio-frequency ID,” or RFID, technology.

“We see the company leveraging its technology leadership (200+ patents) and strong market position (60% share), capitalizing on a $10bn+ opportunity in RFID and connectivity,” write the duo.

RFID, the authors write, is “reaching a tipping point,” and Impinj is the company that has all the parts to capitalize on that:

We see accelerating RFID adoption, as evidenced by a strong uptick in end point IC shipment growth for Impinj to 71% in 2016, up from 21%/52% in 2014/15 (Exhibit 1). The company’s initial focus markets of Retail and Healthcare offer a substantial ~$10bn opportunity by 2020, while newer verticals such as Data Center, Travel, and Automotive should propel growth further. Importantly, with less than 10% penetration in retail and 1% overall, there is still significant runway for growth in RFID technology in the coming years. The company is the only supplier with all 3 elements of the RFID solution (End point ICs, Reader ICs/Readers and software). As a founding member of the Radio Frequency Identification Alliance (RAIN), we also think Impinj is in a strong position to optimize its technology solutions. The company has over 60% market share in end point and reader ICs, while competitors such as Zebra and Alien buy its ICs. In addition, we see merits to its platform sales approach allowing the company to sell higher margin connectivity and software solutions and expand upon its already entrenched position in end point ICs.

They like the growth outlook:

We model a 3-year revenue CAGR of 26%, which could prove conservative relative to recent growth of 43%. In addition, we see favorable GM trends, estimating 310 bps of expansion to 57.1% through 2019. We view the next 1-2 years as a time for the company to reinvest in the business and drive outsized growth, followed by a period of substantial operating leverage in 2019/20. Our PT of $40 is based on a EV/S multiple of 4.2X. This is above the current multiple of 3.6X, but essentially in line with other high growth small cap stocks, despite Impinj’s faster growth and greater operating leverage.

Mind the looming lockup expiration on insider shares, though:

On March 2, 2017, an additional 1.34mn shares (6.5% of Impinj’s outstanding stock) will be eligible for sale in the public market. The company has no other lock ups after that. We recommend using any volatility around this lock up to add to positions. Impinj has traded off 19% since earnings last week vs. the SOX index up 2%, which we view as an attractive entry point ahead of the upward revisions we anticipate for 2017 revenue and EPS.

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From: Glenn Petersen4/24/2017 10:57:24 AM
1 Recommendation   of 1712
How 7-Eleven Will Beat Worker Blues
By Andy Mukherjee
Bloomberg Gadfly
April 23, 2017 4:00 PM EDT

A 7-Eleven store in Japan can no longer afford its most prized possession: the checkout clerk.

The nation's employee shortage is now too acute to waste pricey labor on routine tasks -- like scanning low-value merchandise -- that have proven frustratingly expensive to automate.

But now an old technology is coming to the rescue. 7-Eleven owner Seven & i Holdings Co. is joining forces with rival operators Lawson, Ministop, FamilyMart UNY Holdings and East Japan Railway to introduce radio-frequency identification, or RFID, by next year. That should preclude the need for manual bar-code scanning, Nikkei reported last week, adding that by 2025 all Japanese convenience stores would have fully automated checkouts.

RFID tags are already widely used by retailers in anti-shoplifting devices. Turning them into price tags would enable customers to walk out of stores without having to scan items at checkout counters. Exit gates would open when mobile or card payments have been received.

At 7-Eleven alone, the switch could translate into 50 billion yen ($460 million) in demand for RFID tags, Pelham Smithers Associates wrote in a research note on the Smartkarma website.

New scanner orders for hardware makers like Toshiba TEC Corp., Panasonic Corp. and Fujitsu Ltd. may be a blip on earnings reports; a bigger winner would probably be Sato Holdings Corp., a maker of labels and tags, especially if supermarkets and drugstores follow suit, according to Pelham Smithers researchers. The company's shares have risen almost 10 percent on news of RFID adoption.

What's likely to matter much more to investors, however, is the extent to which Japanese retailers can embrace automation to boost margins. Bloomberg Intelligence analyst Thomas Jastrzab expects operating profit growth at Seven & i to outpace sales gains over the next two to three years, aided by fewer money-losing stores and demand for its higher-margin private-label offerings.

Lawson, meanwhile, is expecting its first decline in annual profit in 15 years, partly because of investment in labor-saving technologies as well as in a newer product mix to appeal to an aging population.

While convenience stores should still come out OK, it's the large-format retailers in Japan that are particularly in need of a miracle cure for weak profitability. As my Gadfly colleague David Fickling noted recently, margins in the core business of supermarket and mall giant Aeon Co. are now so abysmal that it garners the bulk of earnings from financial services and mall development, which account for less than 10 percent of revenue.

Although fashion retailers like Zara use RFID extensively to manage inventory, investing in a 10 yen tag to sell stuff priced 200 yen or lower at a 7-Eleven is a far more challenging proposition. To help consumers warm to the technology, Japan's Ministry of Economy, Trade and Industry might offer subsidies, the Nikkei article said.

The government's involvement is understandable. With the unemployment rate at 2.8 percent, and more than two job openings in Tokyo for every applicant, the country needs to extract the most out of a scarce resource.

Commerce will never entirely move online. But needing a checkout clerk to sell a soda at 7-Eleven is just too expensive a luxury -- both for Japanese society and for shareholders of Seven & i.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Andy Mukherjee in Singapore at

To contact the editor responsible for this story:
Matthew Brooker at

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To: Glenn Petersen who wrote (1669)4/24/2017 11:06:00 AM
From: Glenn Petersen
   of 1712
According to the article, RFID is now officially an "old technology." Tech marches on.

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From: Glenn Petersen4/28/2017 4:20:07 PM
2 Recommendations   of 1712
How Fast is Retail Adopting RFID?

By Dean Frew, CTO and SVP, RFID Solutions, SML RFID — April 28, 2017

If recent news and information about the apparel business and omnichannel retailing are any indication, universal RFID adoption is an industry fait accompli.

Except when it isn’t. Not yet, anyway.

Statistics from retail reporters, industry groups and retailers themselves share RFID usage numbers ranging from 50 percent to 96 percent. In actuality, these numbers are inaccurate, exceedingly optimistic, and obscure the actual realistic pace of RFID adoption, which is far slower and more methodical.

While the aim among retailers to integrate RFID technology into their operations rates is near 100 percent, actual deployment of full RFID systems still hovers in the single digits.

Fully deployed RFID systems — including tags, readers and the supporting software and where retailers are experiencing measurable results and ROI — presently range from only 4 percent to 8 percent.

Why such inaccurate estimates? It comes down to the word “intent.” So many retailers have it in mind to test and install RFID technology. But reality is firmly planted in the present and that goal is significantly different than permanent deployment numbers to date.

And that is where the current statistical confusion of RFID adoption stems from: those actually using the technology versus those who plan to, or are in the preliminary planning stages. For instance, if a large company has a pilot in a single store, that indicates its interest in RFID, but the sheer volume of tagged items is still low.

Beginning to walk

We’re still in the earliest steps of a long race toward mass adoption of RFID systems in retail. Actual apparel market penetration is conservative and considerably less than some reports. GS1, for example, estimates the adoption percentage at more than half, whereas the RFID Lab at Auburn University Retail Study, the retail RFID performance and testing group, puts the installed base closer to four percent.

How did SML come by its dramatically smaller use numbers?

Dissecting the industry

A year and a half ago, we started conducting a deep analysis of the industry to help companies identify where they should focus marketing strategies, as well as planning the geographic location of service bureaus intended to provide encoded tags and what solutions and business requirements were emerging across different segments.

While dissecting public information and mentions of units sold among apparel and footwear retailers (with at least 40 stores located in the U.S. and Europe), we noticed that while tag growth was rising steadily, the number of stores using RFID was still relatively small. That got us curious.

We then examined RFID tag volumes sold by us and other global tag suppliers, which tallied out in 2016 at only a small fraction of the total market of 35 billion to 37 billion tags. Looking at the approximately 200,000 stores in the apparel and footwear market in the U.S. and Europe that will adopt RFID over time, we arrived at the 8 percent penetration rate.

So what does this mean for the industry? Looking ahead, growth is almost assured. SML’s own RFID technology sales have surged 50 percent every year for the past four years, and 2017 is projected to be no different.

Much of that growth results from the pressure of online sales that is prompting retailers to offer omnichannel purchasing for customers who can buy a product from the nearest store, buy online, or purchase online and pick up the product at the nearest store. This omnichannel model requires a highly accurate inventory count in each store.

Fear factors

But there are other factors that have contributed to RFID’s slower than expected acceptance.

First-generation RFID deployment was rocky. Early adopters were in some cases surprised at the cost of the installation when compared against the early benefits. Technology adoption was also hampered in some cases by an inability for companies to align behind its deployment and integration with enterprise data.

Now, system set-up and integration is easier. We’re seeing a shift from where the RFID technology industry as a whole was making RFID too complicated for retailers. Customers want the tech to work, and to use proven technology and solutions. The emphasis is offering solutions that best fit the retailer’s operations, and make pilots and full installations more palatable for the end users and generate proven ROI.

Second, the bigger obstacles revolve around change and how badly a retailer’s leadership believe it needs to.

The “if it’s not broken, why fix it?” attitude stems from comfort and familiarity. We still manage inventory like we have for the past 30 years with SKU (barcodes) vs. Item-Level (RFID) inventory management. The use of RFID technology in retail has demonstrated improvements in inventory accuracy of more than 30 percent (from high sixties to more than 98 percent). It has been proven that, in addition to out of stock and inventory reduction, effective omnichannel can only be executed with this higher level of inventory accuracy.

After a number of deployments, you can get a sense for when a customer’s RFID adoption is going to be successful based on the engagement process with the customer’s steering team. This includes managers of all departments, with the leadership acknowledging unanimously that inventory accuracy has room for improvement.

Just where the RFID investment fits on the company’s priorities list is another issue that can make or break an installation. Apparel and footwear growth is taking place most among brands with their own outlets, and among chains of vertically integrated specialty stores. Department stores, which carry merchandise from a wide variety of brands, are seeing less immediate benefit from RFID deployments.

Yet despite industry tumult, and perhaps because of it, broader acceptance is inevitable. Over the next five years about one third of apparel and footwear retailers will adopt RFID technology because power is now in the hands of consumers. They have a myriad of options in product, cost and delivery. Retailers will have to vault over this ever-rising high bar of shopper expectations to keep and expand their customer bases. It’s up to them on how quickly they want — and need — to change.

Dean Frew is CTO and SVP RFID Solutions for SML Group. He served on executive teams for several supply chain software and RFID solution companies and founded Xterprise in 2002 that was purchased by SML in 2013. He earned a bachelor's of science degree in mechanical engineering from New Mexico State University, and a master's of science degree in industrial systems from Virginia Tech. He also holds multiple patents in electronic packaging and RFID systems, plus pending patents for RFID and inventory and asset systems.

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From: Glenn Petersen5/6/2017 10:43:03 PM
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Another good quarter for Impinj:

RFID maker Impinj tops earnings expectations for 4th quarter in a row

by Nat Levy
on May 4, 2017 at 2:58 pm May 6, 2017 at 1:02 pm

Impinj’s Monza chip.


This story has been updated to include more details on stock price.

Impinj has exceeded Wall Street expectations in each of its four quarters as a public company, after posting another strong quarter to start 2017.

The Seattle-based maker of radio frequency identification tags posted non-GAAP earnings of one cent per share on $31.7 million in revenue, an increase of 47 percent over this time last year.

Analysts surveyed in advance by
Yahoo Finance expected Impinj to post losses of a penny per share on $30.7 in revenue.

Impinj CEO Chris Diorio


“We delivered a solid first quarter, with revenue growing 47% over last year driven by the team’s strong execution and continued market adoption of our platform,” said Chris Diorio, Impinj co-founder and CEO. “We are pleased with the steady progress toward our vision of digital life for everyday items, and we will continue investing in this massive market opportunity to further enhance our leading market position.”

Impinj stock dropped in after-hours trading following the earnings report, but rallied and hit an all time high point of close to $44 per share Friday afternoon.

After raising $69.2 million in its IPO in July, Impinj raised another $39 million in a follow-on public offering this past December, which sent shares up 25 percent.

Impinj was an early player in RFID technology, which uses radio frequencies to track tagged items. The RFID market took longer than the company expected to come to fruition, but the company has been able to capitalize on growing use of the technology in recent years. Its RFID tags and technologies are now used across industries such as healthcare, retail and manufacturing, with Boeing using it to tag parts in aircraft assembly and Macy’s using it to track inventories at retail stores.

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From: Glenn Petersen5/27/2017 11:26:49 AM
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Is The 'RFID Retail Revolution' Finally Here? A Macy's Case Study

Barbara Thau
May 15, 2017 @ 08:45 AM

(Photo by Scott Olson/Getty Images)

I remember back in 2000, my headline was something like, “Get Ready For The RFID Retail Revolution,” or, “Wal-Mart Kicks Off The RFID Revolution.”

Turns out the revolution never materialized. But it might this time around; at least that’s what retailers are hoping.

After nearly 20 years of aborted takeoffs— including a much-watched failed push by Wal-Mart —radio frequency identification technology finally seems poised for widespread retail adoption, if the renewed industry buzz on the inventory-tracking tech is any indication.

RFID automates the tracking of merchandise throughout the retail supply chain — from the warehouse to the store floor — replacing the process of employees scanning products manually.

And retailers are betting on RFID to take inventory-management accuracy, crucial to a solvent retail operation, to new heights.

Inventory management is that unsexy-yet-critical retail discipline that has gained infinitely more importance since my RFID story went to print 17 years ago.

Today, $427 billion in e-commerce sales are now flowing through the supplier-to-store/direct-to-consumer pipelines, exponentially complicating retail supply chains.

As the cost of RFID has fallen dramatically — a RFID tag was priced at about $1 in 2003, and is roughly 10 cents today —retailers are starting to upgrade to the technology to access an item-level view of their in-store and online inventory.

Macy’s And RFID: ‘It’s How We Do Business’

For Macy’s, RFID “is not a project, it’s very much integrated into how we do business,” Bill Connell, senior vice president of transportation, store operations and process improvement for the department store, said in an email message.

Macy’s set plans last year to expand its use of RFID to track every item across its fleet of stores and fulfillment centers by the end of 2018. “We are already halfway to this goal of tagging 100% of products,” he said.

So far, Macy’s has noticed “a big impact” on sales and profitability across several product categories from RFID, Connell said, but will not disclose actual figures until a full year has passed since its implementation.

But according to a presentation by Melanie Nuce, vice president of apparel and general merchandise for standards organization GS1 US1 at the Internet of Retail conference last fall, after Macy’s expanded RFID to its fashion departments, the retailer’s sales volume surged more than 200%, she said then.

Connell did say Macy’s has reaped both financial and operating gains from RFID. “With an increase in the inventory accuracy, out-of-stocks are significantly reduced,” he said. “And by cutting the out-of-stocks, item availability is increased, which can lead to substantial and measurable sales increases.”

Indeed, inventory accuracy and the resulting benefits are hailed as RFID’s biggest payoff. The technology raises inventory accuracy from an average of 63% to 95%, and reduces retail out-of-stocks by up to 50%, according to the RFID Lab at Auburn University.

As retailers are increasingly “selling inventory from their stores online” amid the growth of buy online, pickup in-store programs, an inaccurate read of where an item is at any given moment only compounds the potential for profit–draining markdowns, said Michael Kingston, a director in the digital practice of management consulting firm AlixPartners.

For example, a seasonal item like sundresses that belongs on the sales floor might be mistakenly sitting in a retailer’s backroom due to an inventory tracking error. And just as that error could lead to a missed opportunity to sell the dresses at full price, retailers now also run the risk of promoting the dresses online when they’re incorrectly stocked at the store.

RFID theoretically insures that, when fulfilling an online order from a store, “I actually do have that inventory that I committed to the customer,” McKinsey said.

Show Me The ROI

Macy’s asked outerwear vendor Herman Kay to RFID-tag all of its product with the goal of 100% unit accuracy and full “source-to-store” product visibility.

Herman Kay, which designs and manufacturers coats under its own label as well as licenses such as Michael Kors, Ann Klein and London Fog, worked with GS1 US to implement the necessary standards requirements to do so.

For Macy’s, the upgrade to RFID hangtags on Herman Kay outwear automated product verification and order picking processes that were previously manual, which “virtually eliminated” human error and enabled “unprecedented inventory visibility,” Connell said.

“What suppliers like Herman Kay gain is the same as what we as a retailer gain,” he said. “We can all have confidence that was is picked, packed and transported is exactly what was ordered.”

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From: Glenn Petersen5/30/2017 6:41:56 AM
1 Recommendation   of 1712
Slightly OT:

The rise of the QR code and how it has forever changed China’s social habits

It’s being used to encourage tipping at restaurants, receive cash gifts at weddings...even beggars are using it to collect handouts. The little barcode is driving China’s rapid shift towards a cashless society

Stephen Chen
South China Morning Post
PUBLISHED : Saturday, 27 May, 2017, 11:02am
UPDATED : Sunday, 28 May, 2017, 12:03pm

A little girl plays in a special QR code tunnel in a shopping mall in Nanjing. Consisting of 400 QR codes for brand products and creative games, the tunnel in this April file photo points to how the technology’s acceptance has changed China. Photo: Xinhua

On one of the hottest May days on record, Wang Jiarui walked out of school to see his grandfather, who had come to pick him up, standing in a sweat-soaked shirt.

The seven-year-old Beijing primary school pupil pointed at a nearby convenience store, proposing that his grandfather cool off with an ice-cold Coke. But the old man had forgotten his wallet.

No matter. Jiarui then took his grandfather’s smartphone and summoned to the screen a payment app with a QR code.

“He told me those black and white dots were money,” Jiarui’s grandfather, Wang Meng, recalled later, after that revelatory day in the heat.

“So I tried it [myself] and bought a pack [of cigarettes].”

With his mother’s permission, Jiarui helped his grandparents set up an account to let them buy things on the internet with a mobile phone using QR code scanning. He then showed them the technology could also work at a store counter just by presenting a QR code on the mobile phone to the cashier and letting them scan it to effect payment.

Placards on a seafood stall show various non-cash ways to pay, including QR codes of WeChat and AliPay, at a market in Beijing, in 2016. Photo: EPA

A QR code is a two-dimensional barcode with a random pattern of tiny black squares against a white background, capable of holding 300 times more data than a traditional one-dimensional code. According to internet consulting firm iResearch, payments made via mobile devices by Chinese consumers last year reached 38 trillion yuan (US$5.5 trillion, HK$43 trillion), more than half the nation’s GDP.

QR code scams rise in China, putting e-payment security in spotlight

Thanks to QR code’s rapidly increasing usage at off-line shops, the amount of mobile payments on the mainland is now 50 times greater than that of the US. Mobile payments in the US totalled US$112 billion in 2016, according to Forrester Research.

To consumer behaviour researcher Chen Yiwen, we are witnessing the dawn of “codeconomy”.

“China has started the transition to a cash-free economy faster than anyone could have imagined, largely because of the viral spread of two-dimensional barcode,” said Chen, a professor and researcher with the Institute of Psychology, Chinese Academy of Sciences in Beijing. “It creates a new economy based on scannable codes.”

A restaurant in China has pinned barcode tags to the chests of its waiters and waitresses to encourage tipping. Photo: Handout

From big cities to remote villages, the codeconomy is already changing Chinese social behaviour, according to Chen.

Some restaurants have pinned barcode tags to the chests of waiters, waitresses and even chefs. Customers can scan the code to leave a tip if they are satisfied with service.

Umbrellas the latest trend in China’s sharing economy

Though the measure initially caused controversy after it was introduced last year as many people on the mainland tend not to be in the habit of tipping, customers are noticing a significant improvement in service and some servers are earning an extra 3,000 yuan in tips per month, thanks to the incentive the QR code seems to provide, the Beijing Morning Post reported this month.

Last month, a bridesmaid wore the code tag to collect gift money from guests at a wedding ceremony in Beijing, triggering a verbal fight between the bride and her red-faced, soon-to-be mother-in-law, China Youth Daily and other Chinese media outlets reported.

The bridesmaid with a QR code tag around her neck at a wedding ceremony in Beijing last month. Photo: Handout

A beggar in China has come up with an innovative way to collect his handouts. Photo: Handout

A beggar in Jinan, Shandong province, last month wore a QR code tag around his neck. He was mentally ill, according to mainland media reports, but the code allowed passers-by to give him money through a quick scan. Many other beggars on the street followed suit, according to reports.

The QR code has also helped expand the emerging sharing economy. To rent a bike, for instance, a customer needs only to phone-scan a barcode on the item and the bicycle will unlock itself automatically. Umbrellas and battery packs can be rented similarly, among other items.

Cars to batteries: is China’s sharing economy in bubble territory?

But the QR code stoked farmers’ concern in remote villages when it was reported that county governments were exploring a plan to use the technology to tighten control and governance. By sticking QR codes on farmers’ houses, government inspectors could use a code scanner to find out family names and other information and whether the building they occupied was violating any laws.

A giant QR code is seen near a housing construction site owned by Chinese developer Vanke in Hefei in Anhui province in this 2013 file photo. The 6,400-square-metre QR code, formed from marbles and lawn, can be scanned by mobile phone to enable the phone to play audio and video content of nature, attracting home buyers. Photo: AP

Chen said what seems like disruptive technology today eventually will be diffused into society and become an element of normal life tomorrow.

“The younger generation in China will grow up in a world full of two-dimensional barcodes,” he said. “They may develop a new understanding of money.”

“Maybe, in their eyes, money [will be seen as] not just a means to purchase commodities and services, but also socialise.”

China’s internet giants throw weight behind sharing economy after endorsement by Beijing

Mobile payments began to grow in China as people increasingly used social media platforms such as WeChat to distribute the red money envelopes known as hongbao in Mandarin, or lai see in Cantonese, to friends and relatives in the traditional Spring Festival. Last year, the average WeChat user sent out 28 packets of hongbao every month, according to the platform. Much of the money was used to compliment a well-taken photo or well-written post.

Such behavioural changes are poised to profoundly affect the Chinese economy, according to Chen.

“When the credit card emerged, consumers were found to spend more than when they used cash. The QR code is even more convenient than the credit card, so we have good reason to expect it will increase consumption,” he said.

A two-dimensional quick response QR code is affixed to a tombstone in this 2013 file photo to offer smartphone users extended information about the person buried beneath in Ningbo, Zhejiang Province. Photo: ChinaFotoPress

The QR code was invented in Japan in the 1990s, initially to track automotive industry-related goods. Efforts had been made in other countries, such as South Korea and Japan, to use it in consumer payment, but none has produced the level of success seen in mainland China.

In Western nations, as well, credit cards continue to be preferred over mobile payment, though people increasingly are using Apple Pay in the US.

How QR codes are adding a load more memory to loved ones' memorials

Xue Chengqi, a researcher specialising in human-computer interface at Southeast University in Nanjing, said the QR code’s China success is partly due to efforts by large Chinese internet companies such as Tencent and Alibaba to bring mobile-payment capability to every vendor.

“From supermarkets to street pedlars, the QR code has been accepted and is used by every merchant,” he said. “The technology is simple and easy to use. A transaction can be completed almost instantly in any place with mobile phone signal coverage.

“It is hard to resist. In other countries, there is no such user-friendly environment,” he said.

A photo illustration of a WeChat user scanning a QR code to retrieve a digital red envelope on the WeChat app on a mobile phone during the Chinese New Year period in Beijing. Photo: EPA

Compared to other cashless payment methods, such as the near field communication technology used by ApplePay, the QR code was not seen as safe. Scanning a malicious code could lead the user into a trap set by criminals. For instance, the code could take one to a website used for ill purposes such as stealing bank accounts or other sensitive information.

According to a March report in the Southern Metropolis Daily, about 90 million yuan had been stolen via QR code scams in Guangdong province alone. A suspect in the case replaced the legitimate codes of merchants with fake ones embedded with a virus programmed to steal consumers’ personal information.

Two-thirds of smartphone users now paying by mobile

Speaking at the National People’s Congress in Beijing earlier this year, Liu Qingfeng, deputy chairman of voice-recognition cloud-service provider iFlytek, told mainland media that “over 23 per cent of Trojans and viruses are transmitted via QR codes. The [difficulty] threshold to make QR codes is so low that fraudsters could implant Trojans and viruses into a QR code very easily.”

Some cybersecurity experts have estimated that a quarter of malware found on smartphones is transmitted through QR codes. But Xue said China can no longer turn back.

“Consumers have already developed the habit, and can use (the QR code) almost anywhere. These are the biggest attractions,” he said.

“The technology itself and security issue may be the last thing people considered.”

This article appeared in the South China Morning Post print edition as:
scanning the horizon of the cashless society

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From: Glenn Petersen6/6/2017 11:35:41 AM
   of 1712
Impinj and Everspin Memory Chips Could Be the Next Big Thing

Memory chips are gaining importance over venerable microprocessors. Two ways to play the trend.

By Tiernan Ray Biography
Updated May 20, 2017 1:23 a.m. ET


In the world of computer chips, all glory goes to the microprocessor, and especially to the kind that Intel sells, which serves as the brains of your personal computer.

But there are many other kinds of chips in the universe of semiconductors, some increasingly more important.

This magazine argued in a 2015 cover story that memory chips may represent the most important kind of chip in years to come (“ Watch Out Intel, Here Comes Facebook,” Oct. 31, 2015). That’s because tasks that are taking center stage, such as machine learning, artificial intelligence, and the Internet of Things, continue to place greater and greater emphasis on retaining and analyzing vast amounts of data.

We recommended Micron Technology (ticker: MU) in that article. The shares are up more than 70% since then, which probably doesn’t leave a lot of upside at this point. The good news is that there are two other companies worth taking a look at that are incredibly promising, Impinj (PI) and Everspin Technologies MRAM 1.2561274509803921% Everspin Technologies Inc. (MRAM). They are both small companies that recently came public, and a bet on their stocks is not without substantial risk.

But they offer genuine innovations that have been years in the making, real breakthroughs. That could position them at the forefront of the kinds of developments we highlighted in the 2015 story.

The memory chip is, as it sounds, the repository of data. It stores the ones and zeros so the microprocessor can do something with them. For years, the microchip industry has tried to find the perfect balance between DRAM, which is fast but doesn’t retain data, and flash, which is slower and more prone to failure, but which holds data when the power goes out.

So-called nonvolatile memory chips, an in-between solution, are one of the industry’s holy grails. “Nonvolatile memory is a big deal in almost everything you do,” says Carver Mead, the Gordon and Betty Moore professor of engineering and applied science, emeritus, at the California Institute of Technology. “You have to have it,” he tells Barron’s.

Mead was the CEO of Impinj when it was founded 17 years ago and is now an advisor to the CEO, Chris Diorio, a former University of Washington professor for whom Mead served as a mentor.

What they developed is a chip that can operate on fractions of a watt of power. It is built into “tags” that can be attached to any number of objects, such as your luggage when you go on a Delta Air Lines flight. The tag can then be scanned by a wireless reader situated tens of feet away, which retrieves the identifying data on the tag. On a Delta flight, you can use an app to actually see if your stuff is on the plane. No more lost bags, at least in theory.

THE KEY IS THAT THIS PARTICULAR nonvolatile memory doesn’t need its own power source. Instead, it is activated when the wireless signal from the reader strikes the receiving antenna. That means it can be added to a vast amount of objects for pennies per piece—retail items in a warehouse, clothes on a rack, driver’s licenses, and on and on.

Impinj is interesting because it is not a chip company per se, but a systems business. It sells the nonvolatile chips, the radio-frequency circuitry, the technology for the wireless reader, and the software that makes it all work.

Diorio envisions expanding uses as semiconductor technology continues to make circuits smaller and more efficient. “We can put more and more smarts into them,” says Diorio, so that every object will be able to express all kinds of information about its nature, its capabilities, and its contents.

Impinj went public on July 21 of last year. Since that time, it is up 128%. The company is growing fast, with sales expected to rise 30% this year, and it is already profitable. Like most startups, its stock, at $40.96, is pricey, trading for 78 times next year’s projected 53 cents per share in net income. If confidence rises and the multiple gets attached to projected 2019 earnings of 82 cents, you could be looking at a $63 stock.

THE OTHER OUTFIT, EVERSPIN, is not actually that young, even though it went public last year, on Oct. 7. The technology came out of what had been the chip division of Motorola, which was folded into Freescale Semiconductor and later spun out before Freescale was sold to NXP (NXPI).

Everspin’s chip’s speed is close to DRAM, but it keeps files when power is off, like flash, though it is more reliable; flash tends to break down over time.

Today, the company sells a part that is used in industrial equipment requiring small amounts of memory. Newer parts with greater capacity are being designed into data storage systems coming to market later this year or early next. Traditionally, such computers pass memory from DRAM to flash, but there is a risk that data will be lost in between. Extra circuitry and batteries are added to the storage systems to keep the data alive, driving up cost. By replacing DRAM with Everspin’s chips, system makers can save on all that extra stuff.

“For every $10 worth of DRAM it replaces, it also gets rid of $70 of batteries and other stuff,” says Richard Shannon, who follows the company for Craig-Hallum.

As a result, “this is not a commodity chip,” says Rajvindra Gill, with Needham & Co. “This is an application-specific part that is saving companies money on their total system cost.”

“Where it gets really exciting,” says Shannon, is when Everspin can replace the combination of DRAM and flash in mission-critical computing systems such as a database. Those machines have an appetite for far greater amounts of data, which means more-expensive parts from Everspin, boosting both revenue and, presumably, margins.

The company is expected to have only $43 million in revenue this year, and it is losing money. Matthew Ramsay of Canaccord Genuity says the stock is currently worth 14 times projected earnings of 85 cents per share in 2018, or $12, above a recent $9.90. But it could have a multiple of four or five times sales if its newer markets take off, he says, which would put the stock price well above $12.

The whole history of memory-chip technologies is laced with agony and ecstasy, so this is not for the faint of heart. But then, companies with true breakthroughs can be worth the risk.

TIERNAN RAY can be reached at:,

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