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Companies Still Wary Of RFID Usage But It Is Growing And Will Soon Demand Resources Of Many Suppliers

Many business managers are aware of the growth in RFID as a tool for managing products and inventory.

For several years, large domestic giants such as Wal-Mart have been increasing their use of RFID and demanding that their suppliers participate.

As a result, many companies have had unfortunate forays into the RFID space.

No one doubts that RFIDs will be an important element in domestic and international commerce in the years to come.

However, for many companies, the time and dollars needed to be a player are still too uncertain and too costly.

An annual outlook by IDTechEx RFID authored by Raghu Das offers some clue to this marketplace.

It is clear from the report that financial, security and healthcare will be areas of strong growth in coming years.

Das reports that in round figures, the value of the RFID market grew strongly to $5 billion in 2007, mainly powered by a peak in deliveries of the Chinese national ID card with about $2 billion of cards and infrastructure being delivered by Chinese suppliers.

That made China the biggest RFID market but if, as the report says, the USA is the biggest market.

Globally, the RFID business remained government driven with the Healthcare sector showing particularly strong growth in projects and the Financial, Security, Safety sector dwarfing all others in both expenditure and number of projects. It accounted for a massive 48% of market value with Passenger Transport, Automotive coming second with 19% value share.

These rankings are based on combining the value of tags, systems and support combined.

Das reports that over 500 more consumer goods companies were mandated by retailers to tag pallets and cases. 

He adds however that most are doing little or nothing in the face of the huge financial cost and lack of payback if (when?) they comply.

Their usage averaged less than 300,000 tags each and those were purchased at prices nearer to ten cents than the $5 of passport tags and $50 or more for most active tags.

The expenditures on associated infrastructure was also modest, though the potential is huge when new technology reduces costs so RFID suppliers to this sector can put today’s significant implementation losses behind them.

It also calls for certain retailers to learn to practice mutuality of benefit with their consumer goods suppliers.

In number of projects, Financial, Security, Safety sector were the biggest in 2007 at about 19% of the cumulative projects in 2007, in line with IDTexEx’s identification of it as the leader in money spent. This bodes well for this sector remaining very important in future, albeit with a different mix of types of large project.

The vibrant growth of RFID in the Healthcare sector was mainly due to Real Time Location Systems (RTLS) on staff and assets, particularly those using existing WiFi systems in hospitals.

There were also many other RFID technologies applied to Healthcare and they provided excellent paybacks and improvements to safety and security. As a result, Healthcare - and no other applicational sector - saw a one percentage point gain in market share.

This only took it to 9.2% of all projects, cumulatively, but it is clearly becoming increasingly important. For this appraisal, the report ignored the Leisure category because those projects are usually one off races and not ongoing or leading to something bigger.

For a copy of the full report in a word document go to

The company is also sponsoring an RFID conference in Boston in February with details at


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