RFIDTags.com

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 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:)

I sometimes wonder how successful companies got that way when I see some poor choices they make. In my previous post I discussed why the RFID market has not seen the dramatic growth that was predicted. There was another factor that has lead to the slow growth. The companies who tried to implement RFID and failed for all the wrong reasons. They hired a systems integrator or a consultant that was not a RFID expert.

BlueBean receives calls frequently from panicked project managers that has a failed RFID project on his or her hands and needs to be rescued. At this point their budget is usually busted, the project is not near completion and the read accuracy is poor. The only out for this project manager is to blame the technology. He tells his boss that RFID technology is not ready.
Result: RFID gets the bad rap for a company hiring an inexperienced RFID vendor.

The lesson is that RFID projects require an experienced RFID consultant or systems integrator. Companies beware of bar code companies or IT shops pretending to be RFID experts. They can hide behind their technical expertise and be convincing but RFID is a very different animal. I would recommend asking questions like:
1. What percentage of your annual revenue is from RFID projects?
2. How many complete implementations have you done?
3. How long have you been implementing RFID?
4. Do you have any RFID certifications?

There are few pure RFID consulting and integration companies in the United States.  BlueBean is one of them with over 200 clients

While BlueBean mainly focuses on EPCglobal Gen2 RFID applications and some active RFID solutions the recent announcement from Hitachi about a new  RFID Powder is very interesting.  Leveraging the semiconductor  industry advances in manufacturing smaller and smaller IC’s Hitachi has managed to strip out all unnecessary circuits to create the smallest RFID tag – .05 x.05 mm – WOW!

Their target market is mainly financial – anti-counterfeit – bonds, currency…

You could easily see where this technology could be embedded in different paper products.  Legal companies, accounting companies and hospitals could take advantage of having RFID tags in every piece of paper.  These organizations all face mountains of paperwork.

What about the jewelry industry?  Another great opportunity for “Powder” RFID Tags.

It will be interesting to see what form factor the RFID Readers will take to read these little RFID tags.

Hitachi says the RFID Power will be commercially available in 2-3 years.

The moment of truth is close in determining the winner of the battle for the RFID pharmaceutical market. While the FDA has not and probably will not back one frequency or technology over another California’s ePedigree mandate will provide the market with the de facto standard UHF or HF. California’s 2009 ePedigree mandate for all drug packages coming into the state explicitly requires package serialization…can you say RFID? All of the major drug distributors AmerisourceBergen, McKesson and Cardinal Health are scaling up to met the mandate. The distributors, while they will not declare the winner being UHF or HF, are either testing both HF and UHF or only UHF – another sign UHF will probably win.

The impact of using RFID tags at the item level for the pharmaceutical market will finally provide the hockey stick demand curve the industry has been waiting for. So all of us in the RFID business will be watching the success or failure of the RFID California mandate very closely.

I would like to reference a very good article on this topic of UHF vs. HF (California RFID Mandate). The performance of RFID Readers and RFID Tags as well as the cost seems to be in favor of UHF so it will interesting to see who will win.

It seems I hear less and less each week about how High Frequency (HF) is the best frequency for item level tagging. As near field UHF (Ultra high frequency) continues to mature one by one the advantages and myths continue to disappear.

1. UHF RFID tags are affected by liquids

• UHF far field is affected by liquids – TRUE
• UHF near field is affected by liquids – FALSE
• UHF near field not only works on water but in water!

2. UHF RFID tags won’t work on tags in close proximity

• UHF Gen 2 singulation and anti-collision algorithms are superior to HF protocols – TRUE
• UHF can read >1000 tags/sec – TRUE
• UHF has more reliable reads on large tag populations – TRUE

Stay turned for at least one more posting in this series on HF vs. UHF. If you are interested in experimenting with near field technology you can contact BlueBean or if you are ready to purchase a RFID Reader or RFID Kit you can go line at www.rfidsupplychain.com

Ok… the question of UHF vs. HF for item level RFID tagging is bigger than Beta vs.VHS or for the younger people Blue-ray vs. HD-DVD. This is an all out war between the established HF companies and the new up-and-coming UHF companies. There is so much propaganda out there it is difficult to determine fact from fiction or truths from half truths. In order to compare these two technologies it would be fair to state that I will discuss near field UHF not far field UHF. Some of the HF folks like to compare HF to far field UHF to tilt the playing field in HF’s favor

I am actually going to start with discussing the cost of making each type of RFID tag. If history teaches us anything is that the low cost producer usually wins all else being equal. Assuming the performance of both HF&UHF tags are the same (I will discuss and contrast performance in the next few posts) then tag costs will determine the winner.

I also look at the large companies that would have an impact on pushing the decision to UHF or HF. Wal-Mart has already committed to UHF far field for case and pallet tagging. So I would summarize that Wal-Mart would not want to have two different RFID technologies.

Also the major distributors; Cardinal, McKesson and ABC have come out in favor of near field UHF.

Back to the question at hand…”UHF vs. HF” for item level RFID tagging? If I was a betting man there are several reasons why I would pick near field UHF to become the item level tagging standard:

1. UHF is much easier to manufacture

2. Simple antenna geometries

3. Inexpensive conductive ink process

All else being equal the low cost producer wins. In this case UHF would seem to be the logical choice.

Stay tunned for more posts about RFID hardware and deployments costs and I will contrast performance issues between these two competing technologies.