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'RFID market to reach $5.56 billion by end of 2009' - IDTechEx CEO
21
May '09
Mr Raghu Das, CEO of IDTechEx
Mr Raghu Das, CEO of IDTechEx
IDTechEx announces the new report RFID Forecasts, Players & Opportunities 2009-2019, which addresses the global RFID situation. Areas of growth, undersupply and oversupply and trends are given based on extensive new primary research. The report provides an unprecedented level of forecasts split in many ways. Here the primary author, Raghu Das, gives a summary of the report findings.

In 2009 IDTechEx find that the value of the entire RFID market will be $5.56 billion, up from $5.25 billion in 2008. This includes tags, readers and software/services for RFID cards, labels, fobs and all other form factors. The majority of this spend is on RFID cards and their associated services - totalling $2.99 billion. The market for RFID is growing and a large amount of this value is due to government-led RFID schemes, such as those for transportation, national ID (contactless cards and passports), military and animal tagging.

Application highlights
The tagging of apparel by companies such as Marks & Spencer and American Apparel is now in roll out phase with 200 million RFID labels being used for apparel (including laundry) globally in 2009. The tagging of animals (such as pigs and sheep) is growing strongly as it becomes a legal requirement in many more territories, with 105 million tags being used for this sector in 2009. This is happening in regions such as China and Australasia. 350 million RFID tickets will be sold in 2009 for transit schemes in cities around the World.

The tagging of pallets and cases remains to be a failure, with only 225 million passive UHF tags used for this application in 2009 - a far cry from the 35 billion tags that one consumer goods company alone predicted that it would be buying in 2009, when they presented at an event in 2003. The main reasons for this have been technical failures (poor read rates with high moisture content and metal products), lack of infrastructure and lack of mutuality of benefit between retailers and the rest of the supply chain. Work is still preserving however.

In total, 2.35 billion tags will be sold in 2009 versus 1.97 billion in 2008; 1.74 billion in 2006 and 1.02 billion in 2005.

Follow Governments to follow the money
Our forecasts have taken into account the global economic slow down. Looking at the range of applications, the biggest projects, which tend to be government led and are usually profitable for suppliers involved, are unlikely to reverse. For example, governments will not stop tagging passports or cattle to save money. More and more cities around the World are migrating to using RFID cards and eventually RFID tickets and RFID enabled cellphones for transit. The US Military recently awarded an order involving RFID approaching half a billion dollars. Governments do not need a fast return on investment (ROI). They seek error prevention, improved customer service and efficiency and greater security.

Industry, however, usually seeks rapid ROI. RFID is being applied where it can demonstrate a fairly rapid return on investment - such as apparel tracking, manufacturing, asset tracking, book tagging, etc. Those intending to supply the highest volumes of tags for open markets have had to diversify into many closed loop applications. With some companies having limited funds at this time, some RFID projects will be delayed, but some companies will use this to their advantage and adopt RFID where the paybacks are compelling for competitive advantage and to increase sales. However, it is still very rare for any one customer to buy more than 5 million RFID labels in any one implementation.

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