Barcodes: An Old Technology on the Verge of Big Changes, According to New Report from VDC Research

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Cameras will replace lasers in most settings, enabling breakthrough applications that merge photography and barcodes. Consumer devices pose a significant threat to the barcode industry, particularly for big vendors like Motorola and Honeywell.

Imager-Based Scanning to Replace Laser In Years to Come

"This is a once-in-a-decade moment for the barcode industry. Seldom has so much been in flux." - Richa Gupta, Senior Analyst

Major changes are underway that will transform barcodes and related technologies from low-tech and relatively mature technologies into much more powerful tools for businesses and consumers, according to new research by analyst firm VDC Research. The implications will be far-reaching, enabling a wide range of benefits for businesses and consumers that positively impact our everyday lives. The changes will also be highly disruptive to the large number of vendors who currently serve the almost $1 billion handheld barcode scanner market.

VDC’s research clearly identified an accelerating transition away from laser-based barcode scanners – which have been the universal standard for decades– toward camera-based solutions that can do much more than just simply read a barcode.

Commenting on the research findings, Senior Analyst Richa Gupta said, “Camera-based scanning, or “imaging” as it’s referred to in the industry, is going to displace laser in the vast majority of applications in the years to come. Instead of scanning the barcode with a laser, these new barcode readers use embedded cameras and software to take a picture of and then process the image to read, at the very minimum, the barcode. Simultaneously, these imagers can take a picture of virtually anything – the damaged product being returned by a consumer, the defective part moving down the assembly line, for example. The possibilities for new applications based on the captured information are virtually limitless.”

Gupta noted that this shift toward camera-based imagers would be enormously disruptive for industry leaders like Motorola and Honeywell among others who have huge laser-scanning installed bases. Gupta also commented, “On the plus side, imaging technology is likely to enable a large new application development revenue stream for vendors and their channel partners, as enterprises find clever ways to customize imaging-based applications to meet the unique needs of their business and customers.”

A second big story discussed in VDC’s research is the impact that consumer devices are likely to have on the barcode market in the years to come. Ever-improving cameras and imaging processing software built into many consumer devices coupled with the wide range of professional-grade scanning accessories in the market pose a very real threat to purpose-built barcode scanner vendors – especially in the retail and transportation segments. These markets, which have been mainstays of barcode scanner sales for decades, are increasingly at risk of migrating away from dedicated scanning hardware to mobile devices like smartphones and tablets that offer multi-application support. The downside risk to large barcode technology vendors is significant.

According to Gupta, “Barcodes are not going away. To the contrary, their value to businesses is going to increase as a result of the new applications enabled by imaging-based scanning, novel applications that leverage the internal camera, and consumer devices that make scanning easy and accessible to everyone. The challenges and opportunities ahead for the barcode vendor community cannot be understated in light of these changes.”

About VDC Research
VDC Research is a leading technology market analyst firm, with a longstanding practice covering barcode and other auto-id technologies. Founded in 1971, the firm provides critical market intelligence to the world's leading technology vendors, who rely on its analysts for the data, ideas and insights they need to make critical strategic decisions with confidence.

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Mitch Solomon
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