The veteran established RFID giant has divested non-core businesses resolutely to join the star Physical AI enterprise, which ushers in a value migration across the entire IoT industrial chain.
On September 16, 2026, Trackonomy Systems announced the completion of its acquisition of Identiv's IoT tag business. While this transaction appears to be a traditional business asset integration, it reflects a deeper shift underway in the Internet of Things industry.
Headquartered in San Jose, California, the United States, Trackonomy is an enterprise centered on Physical AI, and the only group in this field that covers autonomous semiconductors, high-yield smart tag process technology and manufacturing, as well as end-to-end solutions. The acquired party, Identiv, is a well-established company with decades of RFID technology accumulation and long-term operation of IoT hardware and tag businesses. The merged organization will operate under the name of Trackonomy Group, bringing together three major business segments: semiconductors, smart tags and end-to-end solutions.
One is deeply integrating into the hardware end of the IoT industry chain, while the other is trying to withdraw from hardware assets and move upstream to the value of software and data. This article discusses what remarkable sample the restructuring between Trackonomy and Identiv will provide for the next stage of the evolution of the IoT industry.
When a traditional IoT company starts to sell its hardware...
What is really worth paying attention to in this acquisition may not be why Trackonomy wants to buy, but why Identiv is willing to sell. After all, this is not an enterprise that was suddenly eliminated by the market and forced to withdraw from the IoT track. On the contrary, Identiv has accumulated decades of experience in technical fields such as RFID, NFC and BLE. Its IoT business covers multiple markets including medical care, logistics, smart packaging and high-value commodities, and has long focused on endowing physical objects with digital identities. Even in March 2026, Identiv announced that it had signed an exclusive supply agreement with IFCO, the world's leading provider of reusable packaging solutions for fresh food, to develop and supply next-generation smart BLE tags and planned to expand the production of high-capacity smart tags.
However, having technology, customers and market opportunities does not mean that this is a high-quality business. In terms of financial performance, Identiv's revenue in fiscal year 2025 was 21.5 million US dollars, and its GAAP gross profit margin was only 6.1%. Although it improved from 1.3% in 2024, the company still faced profit pressure throughout the year. The company had previously completed the transfer of manufacturing from Singapore to Thailand, hoping to improve operating efficiency by reducing labor and manufacturing costs. However, further expanding the hardware business on this basis still means that the enterprise needs to continuously invest in manufacturing, production capacity, inventory, R&D and customer delivery capabilities.
Facing the dual changes of slowing industry growth and shifting customer demand from hardware procurement to digital services, completely divesting the hardware business to break out of the growth bottleneck of traditional manufacturing is a forward-looking strategic transformation for Identiv. So we can see that the transaction mode of this acquisition is extremely special — Identiv transferred most of the operating assets of its IoT business, full series of UHF, HF and NFC RFID tags and inlays, core R&D patents, German R&D team, Thai production base, global supply and marketing channels, even its own IoT brand name, and paid 25 million US dollars in cash in exchange for Trackonomy Series C preferred stock worth 50 million US dollars.
In other words, Identiv has not completely given up the future value of this part of the business. Instead, by holding Trackonomy's equity, it will continue to participate in the future growth of this business and the potential benefits brought by the synergy between the two parties. Identiv clearly stated in the transaction documents that its IoT business continued to lose money, and selling the business to Trackonomy is expected to reduce execution risks and achieve business and operational synergy.
After completely divesting the hardware business, Identiv will complete the reconstruction of its business model, transforming from an asset-heavy hardware manufacturing enterprise to a pure software service provider focusing on physical artificial intelligence and vertical industry SaaS. In the future, Trackonomy will be responsible for connecting the real physical world, continuously collecting data such as the location, status and environment of objects through chips, smart tags, readers and cloud platforms, to provide a reliable "physical world data entry" for software. Identiv plans to acquire and integrate vertical industry SaaS to further convert these real-time data into capabilities for business management, compliance tracking and operational decision-making. Especially in fields with high traceability requirements such as medical care, aviation, food, high-value assets and supply chains, the physical data infrastructure provided by Trackonomy can enhance the real-time performance and data credibility of Identiv's SaaS products, and SaaS in turn can improve the commercial value of hardware and data.
In the author's opinion, Identiv's transformation is quite enlightening to the industry. In the past, IoT enterprises often relied on the sales of chips, modules, tags and devices to obtain revenue. However, with the decline of hardware costs, intensified competition and the maturity of manufacturing capabilities, it is difficult to continuously form high added value only by hardware scale. The idea of this enterprise is to gradually shift capital, R&D and operation resources from the manufacturing link to software, data and industry applications, connect the physical world through the AI platform, and then use vertical industry SaaS to convert data into sustainable business value.
The end point of digital transformation is not necessarily to own more devices, but to establish a sustainable business model around the data generated by the devices. Of course, this does not mean that the hardware itself has lost its value. On the contrary, the case of Trackonomy shows that hardware is still the infrastructure connecting the physical world, while software determines how much commercial value these data can create. In the future, the IoT industry may form a clearer division of labor: some enterprises will deeply cultivate chips, tags and infrastructure, while others will move up to data, software and industry applications. The key is to find the value link that has the most competitiveness and can generate continuous revenue.
Building a Vertically Integrated Physical AI Supply Chain
Another interesting point in this acquisition is the operation model of Trackonomy Group — the company will keep the three major businesses operating independently in the future, and all three businesses will compete independently in their respective markets (with independent customers, partners, technical systems and market positioning), and at the same time jointly build the only vertically integrated Physical AI supply chain in the industry through vertical integration.
Semiconductor (InPlay): A leading enterprise in next-generation low-power Bluetooth (BLE) semiconductor technology, providing ultra-low power, highly integrated system-on-chip (SoC) to make large-scale deployment of smart connectivity possible.
Tag (Identiv): A leading manufacturer and solution provider of NFC, RFID and BLE IoT smart tags, with world-class design, engineering R&D and mass production capabilities to serve customers around the world.
Solution (Sentient): The pioneer of the smart tag category, which has the most extensive patent portfolio in the industry, and a series of products designed to eliminate key obstacles for enterprises in the process of moving towards complete Physical AI digital transformation, including multi-standard radio readers suitable for indoor buildings, public transport and "last mile" scenarios, tag attaching robots, camera tunnel systems, certified high-security APIs, and the cloud-native Sentient Platform.
On the surface, chips, smart tags and tracking solutions belong to different businesses respectively, but in the Physical AI industry chain, they exactly constitute different links from "perception" to "connection" and then to "understanding and application". What Trackonomy really wants to establish is the data and technical synergy between these capabilities, which does not necessarily need to be realized through complete organizational merger.
InPlay has long focused on low-power wireless chips and masters the connection capability closest to the bottom layer of the physical world. Identiv's IoT business solves the problem of how to endow objects in the real world with identity and perception capabilities in a low-cost and large-scale way. Sentient further extends to the application side, providing solutions such as tracking systems, readers, tag application robots, visual channels and cloud platforms. Although the three can form a complete chain of "chip-tag-platform", their customers, product cycles, sales models and technical routes are not completely the same. Simply merging the three companies into one organization may instead increase management complexity and weaken their respective flexibility in facing the market.
For customers, this arrangement also has practical significance. Different customers may only need a certain link in BLE chips, RFID tags or complete tracking systems. If the three companies can still carry out business in a relatively independent way, they can continue to serve original customers and partners without being forced to change procurement relationships due to the internal integration of the group. At the same time, when customers need a more complete Physical AI solution, Trackonomy can combine these capabilities to form cross-product and cross-link solutions.
This architecture is very consistent with the future development of Physical AI: the traditional IoT industry chain often has a relatively clear division of labor according to devices, connections, platforms and applications, while Physical AI needs to deal with a more complex closed loop: objects in the real world must first be identified and perceived, then generate data, enter the computing platform through the network, and then the AI understands these data and forms decisions, and finally may act on the real world through robots, automated equipment or business systems. In this process, it is difficult for a single enterprise to cover all capabilities. Through the acquisition to build vertical capabilities, Trackonomy does not completely erase the boundaries between enterprises. In essence, it is trying to build an industrial structure that can "master key underlying capabilities on its own" and "keep each business ecosystem open".
According to official data, the three major businesses currently collaborate to process nearly 20 million goods shipments every day, and are moving towards the goal of connecting more than 200 million assets.
Conclusion
From Identiv's sale of its IoT business to Trackonomy's inclusion of chips, smart tags, tracking systems and cloud platforms into the same Physical AI territory, this transaction reflects the ongoing value gravity shift in the IoT industry. This does not mean that hardware is exiting the stage, but that the value relationship between hardware and software is being redefined. One end is the physical infrastructure composed of chips, tags and sensors, and the other end is the value realization layer composed of data, AI and industry SaaS. The choices of Trackonomy and Identiv happen to stand at two different positions in this industrial chain. In the future, what kind of industrial pattern IoT and Physical AI will form is worthy of continuous observation.
This article is from the WeChat official account "IoT Think Tank" (ID: iot101), written by Sophia, and authorized for release by 36Kr.