Quarterly Survey Shows Improvement; Continued Interest In RFID

By Reik Read, Robert W. Baird & Co.

We again conducted our quarterly survey of automated data capture resellers, which included 89 participants in June. We saw a modest improvement in trend in June from our March survey, primarily from increased sales of parts and supplies, and from some smaller new projects moving forward. Reseller optimism improved as pipelines continue to build, particularly for warehouse, asset, and inventory management applications. The survey suggests mobile computing, printers and software are key technologies to deliver these applications. But we also note a continued interest in RFID. With respect to specific verticals, government continued to strengthen, while healthcare remained strong. Financial and warehousing showed good improvement, while improvement in retail, transportation and manufacturing was more modest. The following provides more detail on key take-aways.

First, near-term trends are marginally positive. While the overall environment remains meaningfully weak, we are encouraged to see the ratio of positive to negative responses increased to 0.9:1 in June from 0.2:1 last quarter (1.5:1 in June of 2008). This marks the first positive sequential change since December 2007. A corollary to this is the average response, which increased to 2.78 in June from 2.14 in March. Recall, our survey uses a 1-5 scale, where "1" = business is significantly worse in the past three months, or declining by more than 10%, "3" = business is neutral, and "5" = business is significantly better, or increasing by more than 10%.