Accurately scanning bar codes is a critical function in most warehouses and distribution centers. Moving to a "paperless warehouse" operational model requires a robust inventory management solution, as well as reliable bar code scanning equipment to eliminate inefficient processes.
According to a report from VDC Research, the type of bar code scanners on the market is rapidly evolving as traditional laser scanners are displaced by camera-based systems.
The $1 billion-plus handheld bar code scanner market has traditionally been dominated by laser scanners, the same type of scanners used at the supermarket checkout. Imaging-based scanners, which use cameras to decode the bar codes, were initially introduced to handle two-dimension/matrix code scanning. With imaging technology costs dropping, the industry is moving away from lasers altogether, according to VDC's "Global Market for Handheld Barcode Scanners."
“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," says VDC Research senior analyst Richa Gupta. "Instead of scanning the barcode with a laser, these new bar code readers use embedded cameras and software to take a picture of and then process the image to read, at the very minimum, the bar code. 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.”
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According to Gupta, revenues derived from camera-based scanning are significantly higher than laser scanning technology. "If you look at new product introductions on the scanning side, almost all of them are image-based today," Gupta says. "You see very little laser scanning."
Laser scanners are holding on in manufacturing and warehouse environments where there is a need for long-range scanning. Right now, laser scanners typically have better range than imagers. "But performance of imagers is improving at a fast rate, and the number of applications that laser has traditionally dominated is coming down," Gupta says.
Imaging scanners also enable other applications. Not only can they capture data from 2D bar codes (like a QR Code), they can also take photos. That's helpful in scenarios where damaged packaging or merchandise can be photographed. On the retail side, imaging scanners can scan coupons and loyalty cards that reside on customer's smartphones.
"Imagers are just as fast as laser scanners now, and the price has come down," Gupta says. "You can also use the imaging functionality to take photos for claims management. They do more than just bar code identification."
This shift will be disruptive to scanner manufacturers like Motorola and Honeywell, who have large laser scanner-installed bases. New competitors are emerging that will put more pressure on device prices. Motorola owns the assets of what used to be Symbol Technologies, which held most of the important intellectual property related to laser scanning. "There is no one company that has all of the intellectual property around imaging," Gupta says. "The market is more evenly distributed."
However, Motorola, Honeywell and Datalogic still own more than 60 percent of the market collectively.
The use of smartphones and other consumer devices that have built-in cameras will also affect the market. Loaded with a bar code scanning app, most phones and tablets can easily scan both linear and 2D bar codes. Outfitted with special sleds, phones can even match the performance of some hand-held bar code scanners for applications like delivery and retail. That means end users will have a wider variety of more affordable scanning options.
"In retail, they aren't necessarily using the built-in cameras in the phone for these applications," Gupta says. "They are using a sled or sleeve with a more robust scanner. We're seeing technology budgets being funneled toward these types of consumer device solutions rather than purpose-built scanner solutions."
By 2017, 2D imagers will account for nearly $800 million in scanner sales, while laser will generate less than $300 million in revenue, the report said.
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