No news - or at least no major news - was good news for the automatic data capture (ADC) industry over the last year.

There were few mergers or acquisitions. Most of the legal matters hanging over the industry were resolved. And despite the huge amount of hype about RFID, spending on these initiatives in the supply chain was actually quite modest.

Instead, bar code scanning and printing solutions, and rugged mobile computers remained the leading ADC technologies used in manufacturing, warehousing and distribution. The industry's leading providers quietly posted healthy revenues in 2003.

'The majority of companies had a strong year, with 5 to 15% growth,' says Taylor Smith, AIDC analyst, Venture Development Corp., a research group that focuses on the ADC industry (508-653-9000, www.vdc-corp.com).

VDC tags the overall industrial market at just under $5 billion, not counting RFID or consumables, such as the media used for printing bar codes.

What drove the overall ADC market? 'The biggest factor was just the turnaround of the global economy,' says Smith. 'Projects that had been on hold for two or three years finally went ahead.'

While industrial users continue to expand their use of bar codes for product identification in the supply chain, Smith says the need for part marking, lot tracking and product traceability is driving the use of more 2D symbologies in the automotive and aerospace industries. These include Data Matrix symbologies in parcel handling, and Data Matrix and Reduced Space Symbologies (RSS) in pharmaceuticals.

Of particular note looking forward, the U.S. District Court of Nevada ruled that 14 patents on bar code readers and machine vision systems held by the late Jerome Lemelson and the Lemelson Foundation were invalid in January 2004. The court said the patents were invalid, unenforceable and not infringed.

A group of seven ADC suppliers had brought suit against Lemelson to have the patents invalidated. Lemelson and his Foundation had collected more than $1 billion in royalties from end users of bar codes and machine vision.

This is the third year that Modern has compiled a list of the leading automatic data capture providers worldwide.

As before, the list includes companies that manufacture and sell ADC systems, hardware, and software for industrial manufacturing and distribution applications in the United States and worldwide. Moderndoes not include resellers, systems integrators or other companies that do not manufacture ADC hardware.

Since the industry includes public companies like Symbol as well as privately held companies, the list is compiled from annual reports as well as input from industry analysts like VDC's Smith.

This year's leader board looks similar to previous years' lists, but does include one new name near the top.

Symbol Technologies (866-416-8545, www.symbol.com) remains in the #1 spot with $1.53 billion in total revenue, up from $1.32 billion the prior year.

Just as importantly, a reinvigorated Symbol spent the last twelve months putting its finances, management, and legal houses in order. Along with a new CEO, the company reached agreements with the U.S. Department of Justice, the SEC, and class action lawsuits that were pending. Finally, Symbol recently reached a cross-licensing agreement to settle patent litigation with HHP (800-782-4263, www.hhp.com), which stands at #10 with $145 million in revenue.

The number two provider was once again Intermec (800-934-3163, www.intermec.com), at $706 million, up 9% from the prior year.

Taking the number three spot with $550 million in revenue after acquiring Accu-Sort and Willett is Danaher (202-828-0850, www.danaher.com). Accu-Sort was #16 as a stand-alone company in last year's listing with $110 million in revenue.

Close behind in the fourth spot is Zebra Technologies (800-423-0422, www.zebra.com) at $536 million, up from $476 million for the prior year. Zebra was bumped from its third place spot in last year's listing by Danaher.

Further down the list are three additional new entries this year. At #6 and $287 million in revenue is Imaje (770-421-7700, www.imaje.com), a French provider of industrial marking and bar coding solutions with a North American presence. Voice-identification provider Vocollect (412-829-8145, www.vocollect.com) comes in at #18 with $75 million. And at #19 is RFID-provider Savi Technologies (408-743-8000, www.savi.com) with $70 – $75 million, according to analyst estimates.

Meanwhile, PSC, Inc. (541-683-5700, www.psc.com) went private, and came in at #8 with $186 million in revenue.

Few technologies have garnered as much press attention as RFID in the year since the Department of Defense, Wal-Mart, and several other retailers began piloting the technology.

While RFID across all applications is a billion dollar industry today, less than 10% of that revenue is currently associated with industrial supply chain activities. VDC's Smith believes it will be 2006 or later before RFID revenues have a significant impact on the overall growth of the industry. 'The level of interest in RFID has exploded, but people aren't spending a lot on pilots and we're almost through 2004,' says Smith.

What will it take for RFID to impact the total revenues for the industry? 'We still need to answer whether RFID can do in the supply chain what people want it to do from a performance and pricing standpoint,' says Smith. 'That hasn't really been proven yet.'

Going forward, keep an eye on companies like Alien, ThingMagic, Samsys, and Rafsec—their revenues are too small now to gain a spot on the top 20 list, but that may change in the future. However, Smith, like many other analysts, also expects silicon providers like Philips, TI, Hitachi, and now Symbol, with its purchase of Matrics, as well as established supply chain leaders like Siemens, SAP, Oracle, and Sun Microsystems, to make their presence felt in RFID.

Click on the icon to see last year's top 20 list. (Top ADC suppliers - November 2003)