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The Passive RFID market continues its steady climb as more use cases are tested and then implemented for broad-based usage across retail, government, and industry.
User Adoption Drives Growth
RFID is being adopted by wider industries with more use cases within enterprises as they gain experience
with RFID. Key drivers of growth for the industry include:
- Secure seamless, automated data scanning and control. Automating processes that have previously been difficult for organizations to obtain accurate data and strong controls for, without costly labor efforts and high manual error levels. RFID devices that provide this type of automated data collection and control include everything from passes and tokens, access control, and smart devices, to inventory management.
- Ubiquitous mobile devices (cell phones and tablets). Industrial readers have been expensive. Now mobile devices such as cell phones and tablets are starting to be used as readers. These are less expensive and easy to use. Though many settings (warehouse, toll gates, etc.) still require industrial strength (ruggedized) readers, the consumer-retail side of the market is taking a step forward using these, leading to an attitude shift in the value of and ability to implement RFID.
- However, some major manufacturers of RFID tags and readers are still resisting the mobile phone as a reader, for obvious reasons. Yes, RFID readers are designed to be durable and there are specific designs for each purpose (unlike mobile phones). But this limits the growth of supply-chain-wide or ‘open loop’ applications, which can be accelerated by adopting widely available personal mobile devices.
- Solutions at the ready. A decade ago, there were scant software applications out of the box that could leverage RFID data. Now applications abound from healthcare to defense, to farming, to industrial, to retail. These allow the complete management of the process, as well as the capture of the value promised from RFID. These industry use cases, the industry-specific solutions, and especially the cloud, are real catalysts to growth. These will be talked about later in the report.
- Use Validation/Case studies. The market has had a dearth of case studies that are testimonies to the true value achieved. In the past, potential users had to rely instead on claims and promises made by technology companies. In fact, it took seven to eight years to get to 1 billion-tags-per-year rate of shipments. Beyond early adopters, few have spoken in public about hard benefits.3 We are beginning to see more organizations begin the journey. Our forecasts do not imply a ‘tornado effect,’ but healthy growth. A billion or two a year increase in annual tag unit sales (~26% CAGR for 2013-20204) may mean a great deal to the chip or tag manufacturers that may win that deal, but it is still a relatively small market in total dollars. The large ecosystem of converters, software and system integration do benefit from this increase. Importantly, end-users have stated an increase in tagging product categories and use cases.
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