| Small & micro cap project / Activism insight

Impinj, Inc.: Signs of moat

by | Jan 13, 2020

The company’s platform connects everyday items using RAIN, a radio-frequency identification, or RFID, technology it has pioneered. RAIN RFID is a passive (battery-free) wireless system that connects billions of everyday items to the internet, enabling businesses and consumers to identify, locate, authenticate and engage each item.  RAIN RFID is used in a wide variety of applications, including inventory managementpatient safetyasset tracking and item authentication.

Pioneer: The company spearheaded development of the RAIN radio standard, lobbied governments to allocate frequency spectrum, and cofounded the RAIN Industry Alliance, which today has more than 160 member companies. Today, the RAIN RFID industry uses the RAIN radio standard almost exclusively, has access to radio spectrum freely available in 78 countries, encompassing roughly 96.5% of the world’s GDP, and has connected tens of billions of items. 

Sign of moat

  • Market leader: As per the company’s 10-K, it is the only company with an integrated RAIN platform, and has a leading market share in endpoint ICs, reader ICs and stationary readers.
  • Patents: The company’s intellectual property portfolio includes 247 issued and granted U.S. patents, two issued and granted international patents, 27 pending U.S. patent applications and one pending international patent application. 
  • Recurring revenue: The company’s endpoint IC product family, branded Monza, comprises a family of miniature radios-on-a-chip. Each Monza IC is attached to a thin printed antenna on a paper or Mylar backing. The composite inlay is then covered with a paper face to form a tag. End customers attach the tag to an item in industries that include retail, healthcare, automotive etc. The company refers to a tag and its host item as an endpoint. The company’s “Endpoint ICs” differ from traditional silicon ICs in that most endpoint ICs are disposable. For example, when consumers purchase retail items, they discard the price tags containing the endpoint ICs. The company believes that endpoint ICs are the first market for consumable silicon, and are a recurring revenue source for the company.

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