Report shows RFID market endures “booms and busts”

News Story
- 8 Feb 2007 ( #296 ) - CAMBRIDGE, United Kingdom
2 min read
Global Radio Frequency Identification (RFID) take-up rates have been non-linear, with some markets surging in tag take-up, while others, such as pallets, have lagged.

A 2007 RFID technology report, RFID forecasts, players & opportunities, by UK company IDTechEx, said although RFID tag sales had increased generally, numbers had been "disappointing to those expecting higher volume sales of versions in the form of labels".

The report said about 3.752 billion animals, vehicles, pallets, smart cards, passports, banknotes, pharmaceuticals, tyres, books, tools, manufacturing parts and even sushi meals had been RFID tagged in the last 60 years.

Some industries had boomed in RFID adoption.

Tag use at airports had increased to two billion bags yearly, despite "being hampered by technical problems at the chosen global standard UHF frequency for airport baggage", the report said.

UK-based retailer Marks & Spencer was on its way to tagging 350 million items of clothing yearly. The report said M&S had "seen a sales uplift by being able to have close visibility of stock levels".

RFID cards and ticket numbers have "sharply increased", the report said. ERG Australia has announced major orders for transport card systems in Manila, in The Philippines, and Italy, totalling USD40 million.

This year, China will supply RFID cards for its national ID scheme, the largest RFID project in the world.

"This has a dramatic effect on the total 2007 RFID market value as the RFID card portion accounts for 60.3 per cent of the total RFID market value (including tags, systems and services), dropping to 17.2 per cent in 2012," the report said.

In 2006, 70 million animals were tagged. "This will rise to 90 million in 2007." US-based Digital Angel has an order for up to USD10 million to tag fish, count fish populations and monitor migration patterns for the US Army Corps of Engineers, the report said.

However, pallet and case tagging is yet to realise significant benefits.

"Despite progressive mandates, what was anticipated to be a market of perhaps five to six million tags in 2006 came out at only about one third. That's an average of a few hundred thousand tags that each mandated Wal-Mart supplier bought for the whole year," it said.

"Adoption will not be linear but 'hockey stick'," it said.

"Technical problems (the need to read 100 per cent of cases and pallets despite metal/fluid contained in them and nearby) persist although users are pleased with the significantly improved performance from Gen 2. Infrastructure is still threadbare. IDTechEx has heard some major tag producers were looking to get out of the business or at least outsource tag production."

The report said the biggest market was the US.

"Excluding cards, 58.4 per cent of the market in 2007 will be in the US and 33 per cent in Europe. Consequently, although China for the first time dominates the total RFID business, virtually without exporting, the US dominates everything beyond the card part."
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