March 20, 2009
We have all heard and witnessed that RFID has not exploded onto the scene like initially predicted. It has seen steady growth but no big breakthroughs…why?
We need to look back a couple of years and look at the market in 2003. Proprietary RFID equipment (RFID Readers and RFID Tags) were being sold in small quantities but obviously no company was going to invest a large amount of money in proprietary RFID hardware – result: no market movement
In 2005 the EPCglobal Gen 2 standard was passed. Finally the RFID market would explode…wrong. It took most of this year to get the Gen 2 compliant RFID equipment into the hands of integrators and early adapters. Intermec was claiming it owns the RFID patents and wants everyone to pay royalties – result:unsteady market and only pilot programs
In 2006 the results are being published of tests performed with the first release of Gen2 compliant RFID Readers and Passive RFID Tags. The test results are not spectacular. Wal-Mart slows its roll-out plans – result: slow market growth
In 2007 (of late 2006) the second generation of RFID Hardware was released. Performance was much improved and prices have dropped for both readers and tags – result: closed loop applications have become more common
In 2008 what will happen? The performance of RFID equipment is excellent for pallet and case applications. RFID Tag and Reader prices have dropped and are very affordable. Performance is good enough for item level applications to be considered. What is the key to unlock the door that is holding back the RFID market? One word…Volume! If you talk to any of the RFID chip companies (i.e. Alien, Impinj…). They need volume to drive down prices. It is no longer an issue of technology it is an issue of economies of scale. They need volume to drive down tag prices thus making item level applications (pharma, clothing …) become cost justifiable. Wal Mart, DoD and other retailers need to keep the pressure on and the FDA needs to mandate that all drugs sold in the United States be serialized with a RFID tag.
Wow! Looking back on what I just wrote I was only planning on writing a quick post but I really got into this topic:)