Asset protection- including electronic article surveillance (EAS), identification, tracking, and protection from theft - is a major concern of security end-users. The proliferation of portable computer equipment makes the need to identify and track the PC andthe information it contains more urgent than ever. In fact, most portable computer losses result from internal theft.

The advancement and cost reduction of radio frequency identification (RFID) for use in asset tracking provide manufacturers a new opportunity to assist commercial end-users with integrated asset tracking solutions. Manufacturers are providing total solutions to customers' asset tracking problems, rather than one component to solve part of the problem. Customers can now expect better asset protection solutions, including inventory tracking, prevention of unauthorized equipment removal and accurate product delivery. Asset tracking tags and software in an integrated system allow companies to track tagged equipment throughout a building and to match an asset tag with an employee access card. If the tagged asset is presented at a reader stationed at an exit without a corresponding read of the authorized employee ID card, an alarm will alert security personnel. In addition, internal equipment inventories are automated through network management. The network automatically recognizes a configured PC through the RFID tag when it is connected to the network.

Manufacturers answer the need To answer the growing asset tracking needs, HID Corp. has developed a strategic alliance with IBM and Atmel to produce an RF asset tagging and tracking system. The tag is installed on IBM PC system boards at the time of manufacture. It prevents unauthorized removal, and the PC can be disabled remotely, requiring a password to access the system's critical data. HID-provided protocols will allow traditional proximity access control readers to track the computers.

Financial experts cite evidence of growth In an August 1998 report, researcher and financial analyst Jeffrey Kessler, senior vice president, Lehman Brothers, tracks EAS as part of the broader "auto identification" market. Kessler has been following two large manufacturers of EAS - Sensormatic Electronics and Checkpoint.

According to the Lehman report, "EAS as a stand-alone industry is dead. Rapidly changing technology and markets and new products force us to retire the old 'electronic article surveillance' moniker, representing about $1.2 billion in revenue, in favor of a broader 'loss prevention and asset tracking' industry, representing more than $6 billion, called 'automated identification,' or 'auto ID.' In short, EAS now becomes a product line within the larger auto ID industry. The industry includes smart tags (for tracking inventory, as well as anti-theft); smart cards for access control; point-of-sale management and detection systems; bar code systems; radio frequency ID; and biometrics. Add in loss prevention technologies, such as closed-circuit television and point-of-sale electronic security and tracking systems, and the overall market in which these companies compete is about $8. 5 billion." Market research firms believe the overall auto ID market can continue to grow at a 20-percent rate because industrial and manufacturing companies have become enthusiastic converts, putting the technology to use in new applications - and achieving productivity gains in the process.

Bar codes have created a revolution in the logistics industry, which has spread to other markets. The transmission of the data from bar codes via wireless local area networks has broadened their use. But bar codes have data limits of 2,000-5,000 characters. Use of smart cards and tags, although costly, will continue to expand in auto ID markets, particularly in businesses that need ID tags that read and write.

Manufacturing companies in the auto ID industry are no longer alone in the marketplace - they now compete in a larger $8 billion world. Companies such as Sensormatic, Checkpoint, Symbol Technologies, Telxon, HID, Texas Instruments and Motorola Indala, among others, are integrating asset tracking technologies with automated point-of-sale and management information systems, as well as with video and access control systems, to provide asset information to end-users. For additional information on the Lehman report contact Jeff Kessler jkessler@lehman.com. For information on HID's Asset ID, visit www.prox.com.

Projected growth of loss prevention and asset tracking market 1997-2002 (figures in millions of dollars)

1997 2002 Percentage Bar Code 3,000 5,400 15.8% Other OCR 250 425 14.2% Mag Stripe Equipment 750 1,400 16.9% Smart Card Equipment 125 225 15.8% RFID 275 1,000 38.1% EAS 1,100 2,000 16.1% Biometrics 100 400 41.4% Voice Data Entry 30 90 31.6% Access Control Software 225 675 31.6%

Total 5,855 11,615 18.7%

Sources: Lehman estimates, Frost & Sullivan, AIM International.