RFID tags are poised to become the most far-reaching wireless technology since the cell phone, according to In-Stat. Worldwide revenues from RFID tags will jump from $300 mln in 2004 to $2.8 bln in 2009. During this period, the technology will appear in many industries with significant impact on the efficiency of business processes. The widespread adoption of the technology will take a couple of years to really ramp up, as tags are still relatively expensive, ranging from a low of around $0.15 to a high of over $100. Privacy issues remain a concern for many applications of RFID, and currently courts and governments around the world are in the process of determining related legal issues. The second-largest market for RFID, at least in the latter years of the forecast, is consumer products, even though this market is one of the most privacy-sensitive areas.
Deloitte & Touche expects collecting, collating and presenting RFID data will become a very sizeable industry, with technology companies grabbing the lion’s share of revenue. By the end of 2005, more than 10 bln RFID tags will have been sold and used.
Most of the 137 companies that undertook to meet RFID mandates during 2004 did get involved with the technology to a greater or lesser degree. But many started small, allocating much lower budgets to the effort than the $2-3 million some analysts had predicted. In 2005 these companies are increasing their investment, to scale up and integrate RFID into their normal operations. ABI Research sees companies increase their RFID budgets three to five times in 2005 compared to 2004.
ABI Research surveyed supply chain optimization providers, government and counter-terrorism agencies and loss prevention firms on plans to use wireless tracking technologies. GPS and cellular telephony happen to be the most widely adopted technologies, with Wi-Fi and Bluetooth gaining on current leaders.
Encompassing a wide range of applications ? from helping to protect the U.S. drug distribution network from counterfeiters to ensuring child safety ? perhaps no other autoidentification concept has gained as much attention in 2004 as the topic of radio frequency identification (RFID). And with major companies planning to increase the deployment and integration of RFID systems in retail stores and warehouses in the years ahead, the market for related consulting, implementation, and managed services is expected to grow by 47% in 2004 and reach $2 bln worldwide by 2008, according to IDC.
RFID and wireless autosensing solutions have evolved into a legitimate consulting, implementation, and managed services opportunity for many of the world?s most well-respected services organizations. Approximately 66% of enterprise organizations considering an RFID solution in 2004 reported they would prefer to use external resources when implementing such projects. Services firms are increasing levels of investment in personnel, marketing and partnerships for RFID in anticipation of increasing demand for services through 2008. While each of the 15 RFID services vendors profiled in this report have special qualities and unique capabilities, IDC has identified two leaders having the greatest potential for future marketshare gains
The global market for RFID middleware is expected to reach an estimated $16.4 mln in 2004, and an estimated $43 mln in 2005. This represents an annual growth rate of 162%. RFID middleware will account for roughly 3% of RFID systems revenues by 2007, or $135 mln. The global market for RFID systems reached $1.1 bln in 2003. VDC estimates the market will reach $1.5 bln by the end of 2004. This represents growth of 35% year-over-year. VDC expects the market for RFID systems to experience a compound annual growth rate (CAGR) of 43% through 2007.
Gartner analysts tried to put an end to a retail industry myth that radio frequency identification (RFID) tags will cost as little as five cents in the near future. The analysts said passive RFID tags cost from 40 cents to $10 and active tags usually run from $4 or $5 to hundreds of dollars. Gartner predicts that five years out, the most competitive RFID tags will cost about 20 cents, as reported by Tekrati.
IT decision makers from a variety of industries including manufacturing, retail, transportation, and the government sector were surveyed by Wavelink Corporation in conjunction with Frontline Solutions Magazine and Frontline Solutions Conference and Expo. 79% of survey respondents plan to pilot or implement an RFID solution. Of this number, 22% have already implemented a pilot RFID program; while 42% will implement in the next 12 months. The remaining 21% plan to implement an RFID solution within 12 to 24 months. The top reasons cited for implementing RFID include improving the ability to track goods, meeting customer requirements, and receiving greater efficiencies in shipping and receiving. Concerns focused on high cost, an early, untested market, and lack of sophisticated software to integrate RFID with other business applications such as supply chain management and ERP systems.
Consumer goods manufacturers, which will spend an average of $6.9 million each on RFID in 2004, need to put their ROI into perspective looking beyond generic benefits, according to the Yankee Group.
Gartner listed top 10 technologies that will become strategic in 2005:
- Instant messaging
- Voice over IP
- Software as a service
- Real-time enterprise infrastructure
- Utility computing
- Grid computing
- Network security convergence