Silent Commerce
By Jeff Goldman, Thu Jan 24 00:00:00 GMT 2002

Intelligent objects that can talk to each other? They?re no longer the stuff of science fiction.

In Neal Stephenson’s visionary novel The Diamond Age, the city of Shanghai is defended by a network of unmanned aerial vehicles that guard the urban airspace, floating pods designed to take care of themselves:

If a pod thought it was having mechanical trouble, it would send out a message, and a fresh pod would fly out from the Royal Security installation beneath Source Victoria and relieve it so that it could fly home to be decompiled…

An implausible vision of the distant future? Not really.

At Star City Casino in Sydney, Australia, radio frequency identification (RFID) tags sewn into waistbands, shirttails, and collars allow sensors throughout the building to track the locations of each of the casino’s over 80,000 uniforms, from the laundry chute to the casino floor and back again.

Mark Waugh, Star City’s CIO, says that allowing the laundry to manage itself has proved extremely successful. “The wardrobe management system really demonstrates the versatility of silent commerce,” he said. “By automating a labor-intensive manual process, Star City cleaned up in the savings department.”

Silent commerce uses tools like RFID tags, MEMS sensors, and GPS to turn ordinary objects into intelligent devices. Clothes that know when they need to be cleaned are just the beginning: when you enable objects to tell each other what they need without requiring humans to be in the loop, the possibilities are endless.

I’ve lost my Cocoa Puffs

Beyond Star City’s laundry management system, the next logical step is purchasing. Researchers at Accenture Technology Labs have developed a Barbie doll that shops for itself: it’s a prototype Autonomous Purchasing Object, an exploration of object-to-object commerce. By reading the RFID tags embedded in objects around it, the doll can select the items it wants, then order them directly from the manufacturer.

Dr. Martin Illsley, Accenture’s Director of Technology Research and Development, explains that the Barbie doll is simply an illustration of a larger concept. “We imagine a world where many objects will have unlimited decision-making capability and act on our behalf,” he said. “This isn’t just about toys: it could be a car looking for new body accessories or electronic maps for the navigation system.”

Accenture researcher Joseph Tobolski suggests that, like the laundry at Star City Casino, it’s all about automating basic processes that would otherwise be labor intensive. Imagine self-repairing automobiles, factory equipment that orders its own replacement parts—or a supermarket that can restock itself.

“You might have intelligent grocery shelves which can determine the objects that are sitting on top of them,” Tobolski said. “For groceries that do direct store delivery, where the vendor is stocking the shelves, those shelves can actually send out a message in real time, saying, ‘Hey, I’ve lost my Cocoa Puffs,’ and build the manifest before the driver ever gets there. Conversely, they can call off a scheduled delivery if there’s no need to do it.”

Just last year, RFID vendor SAMSys Technologies worked with International Paper to develop what it called a “SmartShelf” for Revlon products. When ultimately deployed, such shelves could not only identify which products needed restocking and order replacements, but could even record how often each item was picked up and examined by potential purchasers.

Still, before you can put an RFID tag on every box of Cocoa Puffs or bottle of nail polish, those tags have to be so cheap that they’re literally disposable.

Towards the sub-cent chip

According to Ovum analyst Marc Jacobson, the good news is that RFID pricing is coming down; the bad news is that it’s still too high for nail polish. “Five years ago, these tags cost $250; today, you can get them for ten or eleven dollars,” he said. “If you’re going to deploy one of these tags on each item you sell, though, it really needs to come down to pennies before it makes sense.”

Accenture’s Tobolski explains that groups like MIT’s Auto-ID Center are working to make tags as cheap as possible—down to less than a penny a chip. “There is a theoretical limit on the size and expense of the chips,” he said. “However, somebody’s eventually going to come up with a revolutionary way to produce chips that’s going to make sub-cent RFID chips possible.”

In the meantime, Clifford A. Horwitz, SAMSys Technologies’ Chairman and CEO, contends that the wait for a cheaper RFID tag is unnecessary. “Affordable becomes a very relative term, because it all depends on what it is that you’re tagging,” he said. “I don’t believe that there is one magic number, that when the tag price comes down to ten cents or five cents, you suddenly have the magical solution.”

Instead, Horwitz says, the real barrier lies at the other end of the technology: RFID readers. “One of the holy grails for supply chain applications is the installation of a reader in every doorway of a distribution center,” he said. “The average cost for a reader is anything from five to ten thousand dollars. In a typical Wal-Mart distribution center, there are probably 250, 300 doors. That’s a lot of money for one warehouse.”

At every level, cost remains an issue. Still, Ovum’s Jacobson notes that there are some industries where the expense is worth it—such as a storehouse for single malt scotch. “If someone is walking off with a thousand-dollar case of scotch, a ten-dollar tag that’s going to be able to identify when a case has left its normal line of movement within the warehouse can bring some value to a distributor,” he said.

And that, he says, is how things are likely to proceed. “I would watch deployment of this technology over the next five years in some of the higher-value areas: jewelry, expensive spirits, high tech gadgets, things like that,” Jacobson said. “It would make sense to see deployment start there and then move into more commodity-type environments like grocery store distributors.”

From Mobil to McDonald’s

One more challenge stands in the way of cheap and easy RFID deployment: industry-wide standards. Interoperability, Horwitz contends, is the real issue. “If I buy from TI’s reader, then I can’t buy a tag from Phillips, because they are not interoperable,” he said. “Clearly, you cannot have RFID be successfully implemented in a world where such mutually exclusive decisions have to be made.”

The trade association AIM, Inc. lists a dozen different Jeff Goldman is a freelance writer covering a wide range of topics for a number of online journals. He currently writes regular articles for's ISP-Planet. Brought up in Belgium, Jeff spent the last decade in New York, Chicago and London; he now lives in Los Angeles.