Tuesday, April 23, 2013

Bluechiip (BCT.AX) Putting MEMS and RFID Together

Bluechiip (BCT.AX) is a tech company in an often-overlooked niche.  They are developing a next-generation RFID electronic marking system that can identify samples stored in extreme environments.  Their chip-based record solves problems that more primitive technologies cause for biobank records.

The bluechiip team is split along lines typical of a tech startup.  The CEO is experienced in establishing commercial relationships and the chief technologist created bluechiip's proprietary tech.  The rest of the team knows MEMS and product engineering but they need someone with experience in the biobank market.

RFID chips that can sense temperature have been around for several years and competitors exist.  BioTillion's BoxMapper coupled with RURO's FreezerPro ColdTrack is one such example.  Research Elemnts' Cryo Element combines barcodes with RFID.  One key to success for bluechiip will be to demonstrate that their RFID reader can display a medical sample's record without requiring the sample's removal from its cryostorage container, thus eliminating the chance of thawing.  I don't know whether their reader and chip have the same price points as competitors.  If they cost more, they need to store and display more data than a barcode to be desirable.

One thing working for bluechiip is that customers who adopt their reader/chip solution will have switching costs of returning to less effective record methods or converting to a competitor's RFID solution.  This can give them a competitive advantage if they sign up a major biobank as an early adopter.  Committing to record-keeping infrastructure is just like most major IT decisions.  One you have a company-wide solution, it's difficult (but not impossible) to change it.

I noticed something interesting in my background research on medical RFID platforms that use MEMS technologies.  A lot of them operate from Australia, just like bluechiip.  Bluechiip may be on to something.  I'm not ready to invest in them because I need to see them capture some market share to prove that their concept works for clients.  Let's see where they are at the end of 2013.

Full disclosure:  No position in BCT.AX (or other companies mentioned) at this time.